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HomeMy WebLinkAbout11.a. Committee Minutes-Finance 12-29-2023Item 11.a. J anuary 18, 2024 T O: HO NO R A B L E B O A R D O F D I R E C TO R S F RO M :K AT I E YO UNG, S E C R E TA RY O F T HE D I S T R I C T S UB J E C T: D E C E MB E R 19, 2023 - F I NA NC E C O MMI T T E E - P R E S I D E NT HO C K E T T A ND ME MB E R L A UR I T Z E N Attached are minutes of the above C ommittee meeting. AT TAC HM E NT S : D escription 1. F inance C ommittee Minutes 12-19-23 January 18, 2024 Regular Board Meeting Agenda Packet - Page 60 of 84 Page 1 of 7 REGULAR MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT FINANCE COMMITTEE M I N U T E S Tuesday, December 19, 2023 9:30 a.m. Committee: Chair Barbara Hockett Member Mariah Lauritzen Staff: Roger S. Bailey, General Manager Philip Leiber, Deputy General Manager – Administration Benjamin Johnson, Internal Auditor Edgar Lopez, Capital Projects Division Manager Kevin Mizuno, Finance Manager Stephanie King, Contracts & Procurement Administrator (joined during Item 3.b.) Thomas Brightbill, Senior Engineer (left after Item 3.d.) Christopher Thomas, Accounting Supervisor Diana Diaz, Provisional Accounting Supervisor (joined during Item 3.c.) Shari Deutsch, Risk Management Administrator Stacey Durocher, Administrative Services Assistant 1. Call Meeting to Order Chair Hockett called the meeting to order at 9:30 a.m. 2. Public Comments None. BOARD OF DIRECTORS: BARBARA D. HOCKETT President MARIAH N. LAURITZEN President Pro Tem MICHAEL R. MCGILL TAD J. PILECKI FLORENCE T. WEDINGTON PHONE: (925) 228-9500 FAX: (925) 372-0192 www.centralsan.org January 18, 2024 Regular Board Meeting Agenda Packet - Page 61 of 84 Page 2 of 7 Finance Committee Minutes December 19, 2023 Page 2 3. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred November 10, 2023 through December 7, 2023 The Committee had no questions. COMMITTEE ACTION: Recommended Board approval. *b. Receive Budget-to-Actual Expenditure overview through the month of November 2023 Mr. Mizuno provided a brief overview of the Budget-to-Actual Expenditure included in the agenda materials. Operations and Maintenance Fund (O&M) Expenditures for the O&M Fund were $35 million through November which was lower than the year-to-date budget of $38.1 million resulting in a favorable variance of $3.1 million, or 9.1 percent. It is anticipated that the variance percentage will continue to contract and ultimately be within the five percent targeted figure by the end of the fiscal year. Sewer Construction Fund (SCF) The SCF had a total of $23 million in expenditures through November 2023 compared to a target of $43.7 million. Mr. Mizuno disclosed to the Committee that the blue line represents budgeted expenditures for the Capital Improvement Budget (CIB), which is significantly higher than the adopted budget. He explained it is higher due to unspent carryforward of capital appropriations from the prior year, which roll into the following year’s budget as a budget amendment. Mr. Mizuno also mentioned that commencing this week, Finance, Capital, and Planning staff are working together to utilize the Oracle Enterprise Performance Management (EPM) tool to collect current year actual spend projections through the remainder of the fiscal year. Staff recently rolled out a new system tool to collect projection data directly from project managers. Obtaining this information is expected to provide a more accurate prediction of the year-end spend and to better estimate the potential carryforward and assess its impact on next year’s CIB. Mr. Leiber asked if the blue and green lines reflected an actual projection or if that was based on the prior year spend rate, which had been the case previously. Mr. Mizuno said it shows an actual projection utilizing the EPM system. January 18, 2024 Regular Board Meeting Agenda Packet - Page 62 of 84 Page 3 of 7 Finance Committee Minutes December 19, 2023 Page 3 Member Lauritzen asked if staff knew when the three to six percent gap in hiring will close. Mr. Mizuno said that it may be higher than budgeted due to the four new full-time employee positions approved in the current year budget but said he would defer to Human Resources (HR) on the status of recruiting and filling all of the new positions. Mr. Leiber stated that HR normally does not start recruitments at the end of the year due to low responses. The Committee had no further questions. COMMITTEE ACTION: Recommended Board receipt. c. Receive 2023 Capital Projects Design-only Audit Report Mr. Johnson provided a detailed overview of the presentation included in the agenda materials. He explained that the audit report was split into two phases due to some outdated procedures. • Phase 1 pertains to the internal controls within the policies and procedures. The focus will be to assess Capital’s coordination efforts with purchasing, in regard to transparency and formality. • Phase 2 will be more project specific and will focus on the management of those projects in relationship to the internal controls that are in place. The primary focus of this in-depth review will be on compliance with internal procedures and regulatory expectations. In response to Member Lauritzen regarding the communication aspect, Mr. Johnson outlined the following findings. Capital Projects Division: • Procedural documentation does not fully reflect the current process. • The process needs to be standardized and more robust for reporting to key stakeholders. • Agreement/contract drafts are currently being shared and edited via email, which may lead to version control. Finance Division: • Key stakeholders do not receive regular contract/agreement processing status updates. Chair Hockett asked if invoicing would be included in the findings mentioned. Mr. Johnson confirmed that invoicing would be included in procedural documentation and reporting formally in real time. January 18, 2024 Regular Board Meeting Agenda Packet - Page 63 of 84 Page 4 of 7 Finance Committee Minutes December 19, 2023 Page 4 Member Lauritzen asked if there was a review cycle on procedural documentation. Mr. Johnson stated that a review is recommended once a year, but there is currently no process in place. Member Lauritzen asked if formal procedures all had review cycles. Mr. Leiber stated that Board Policies (BP) and associated Administrative Policies (AP) are reviewed bi-annually. In response to Member Lauritzen’s question whether Statement of Procedures (SOP’s) had a standard review cycle, Mr. Leiber stated they did not. She then asked if an SOP would include operating procedures for the plant. Mr. Bailey stated there might be some basic procedures, but he will check. Mr. Johnson confirmed that operating procedures have not historically been reviewed every three years, so there is a need for an updated document that can be referred to. Chair Hockett asked if a project manager was hired to oversee the District’s Capital projects. Mr. Bailey stated that a management analyst was hired to coordinate between Finance and Engineering. The Committee had no further questions. COMMITTEE ACTION: Recommended Board receipt. d. Review draft Position Paper to conduct a public hearing to receive public comment on adopting proposed uncodified Ordinance No. XXX to establish a reimbursement fee applicable to parcels which could connect to Job 6456 on Paseo Nogales Road in Alamo Mr. Brightbill provided an overview of the proposed uncodified Ordinance included in the agenda materials. He explained to the Committee that the work for Project 6456 was submitted in a timely manner by the installer. This project was completed under the Mainline Extension Program in 2010, however a public hearing was never scheduled for the Board to set the reimbursement fee. Chair Hockett asked about the fee since it would have been different in 2010. Mr. Brightbill stated that staff will follow the specified procedure in the District Code which bases the fee on the original construction cost and adjusts it over time. In response to Member Lauritzen’s question regarding what prompted this, Mr. Brightbill stated that periodic reviews of the reimbursement accounts are done but staff also received an inquiry. Member Lauritzen asked whether there was an expiration date. Mr. Brightbill stated there was a 20-year expiration date from the date that the District January 18, 2024 Regular Board Meeting Agenda Packet - Page 64 of 84 Page 5 of 7 Finance Committee Minutes December 19, 2023 Page 5 accepted the project. This Project was accepted in 2010 therefore, the expiration would be 2030. Chair Hockett asked if this could be reviewed legally and attached to the property. Mr. Brightbill said yes. Mr. Bailey stated that this is a question that should be discussed further because it involves disclosure, and if not, the new property owner would be subject to those reimbursement fees. Chair Hockett asked how these are being tracked and if there were more. A discussion ensued regarding the current manual systems in place versus the new Oracle permitting and billing system, as well as other initiatives through the Information Technology (IT) Strategic Plan. COMMITTEE ACTION: Recommended Board approval. 4. Other Items *a. Review Risk Management Loss Control Report as of December 4, 2023 Ms. Deutsch provided an overview of the report included in the agenda materials. She stated that the report has been updated with two claims that have been settled since the report was posted. COMMITTEE ACTION: Received the report. b. Receive biennial update on Emergency Management and Continuity of Operations programs Ms. Duetsch gave an overview of the presentation provided in the agenda materials. She said that training is being coordinated for Board Members regarding Emergency Operation Controls with the Secretary of the District. COMMITTEE ACTION: Received the update. 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. January 18, 2024 Regular Board Meeting Agenda Packet - Page 65 of 84 Page 6 of 7 Finance Committee Minutes December 19, 2023 Page 6 7. Future Scheduled Meetings Tuesday, January 23, 2024 at 2:30 p.m. Tuesday, February 27, 2024 at 2:30 p.m. Tuesday, March 19, 2024 at 2:30 p.m. 8. Adjournment – at 10:45 a.m. *Attachments January 18, 2024 Regular Board Meeting Agenda Packet - Page 66 of 84 Page 7 of 7