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Home My WebLink AboutFinance MINUTES 12-17-24Page 2 of 6 110ENTRAL SAN REGULAR MEETING OF THE BOARD OF DIRECTORS: MICHAEL MCGILL CENTRAL CONTRA COSTA President SANITARY DISTRICT FLORENCET WEDINGTON President Pro Tent FINANCE COMMITTEE BARBARA D. HOCKETT JEAN KUZNIK TAD J PILECKI MINUTES PHONE: (925) 228-9500 Tuesday, December 17, 2024 FAX.- (925) 372-0I92 2:30 p.m. www.centralsan.org CnmmittPP " Chair Tad Pilecki Member Mike McGill (Alternate) Staff. - Roger S. Bailey, General Manager (arrived during Item 3.a.) Greg Norby, Deputy GM — Engineering & Operations (arrived during Item 3.a.) Philip Leiber, Deputy GM — Administration Edgar Lopez, Capital Projects Division Manager (left during Item 4.a.) Kevin Mizuno, Finance Manager Brennan Rogers, Accounting Supervisor Michelle Gonsalves, Accounting Supervisor Shari Deutsch, Risk Management Administrator (arrived during Item 3.a.) Eileen Hansen, Deputy Secretary of the District Amal Lyon, Management Analyst (joined during Item 3.a.) Karen DeLong, Administratvie Services Assistant Stacey Durocher, Administrative Services Assistant Call Meeting to Order Chair Pilecki called the meeting to order at 2:30 p.m. 2. Public Comments None. January 9, 2025 Special Board Meeting Agenda Packet - Page 79 of 93 Page 3 of 6 Finance Committee Minutes December 17, 2024 Page 2 3. Items for Committee Recommendation to the Board a. Review and recommend approval of expenditures incurred November 8, 2024 through November 27, 2024 Member McGill inquired about the following expenditures included in the agenda material. Check No. 249 Emtec Consultinq Services, LLC for $13,000 Mr. Mizuno stated that Emtec provides the ongoing maintenance and support for the District's Enterprise Resource Planning (ERP) system. H6 stated that this contract includes two components, ongoing maintenance support on a retainer basis (ClearCare), and implementation for new and enhanced/modified system functionalities. Check No. 288 Oracle America, Inc. for $58, 800 Mr. Mizuno explained that this charge is for annual support provided directly by Oracle. While Emtec (now "Apps Associates') is the consultant that assisted Central San with the ERP implementation and is the primary source of ongoing support, Oracle is a supplemental contract for both escalated issues that Emtec is not able to support, and other support that can be provided more cost effectively by Oracle. In response to Chair Pilecki's question regarding the new format of the expenditure report, Mr. Mizuno explained that the old reports had to be revised following the implementation of the new banking system, which now applies a pooled cash design, not in place previously, which does not have separate check number strings for each fund. With changes to the underlying expenditure detail reports, staff developed a new summary page, which is intended to be more informative showing sub -totals by date and fund, including a grand total of payments during the specified timeframe. While the new expenditure reports do not yet show Automated Clearing House (ACH) payments (only checks), separate lines were included on the summary page to list out ACH payments made. Mr. Mizuno emphasized staff will continue to work with the implementor to update the system -generated expenditure reports so that ACH payments can eventually be included in the attached detail reports. Check No. 297 Rai/Pros Field Services, Inc. for $56, 507.50 and $54, 300 Mr. Lopez stated that the referenced expenditures are for permit fees paid directly to RailPros for the Urgent Force Main repairs project near the railways and refineries. January 9, 2025 Special Board Meeting Agenda Packet - Page 80 of 93 Page 4 of 6 Finance Committee Minutes December 17, 2024 Page 3 Check 383 Procore Technologies, Inc. for $140,305.62 Mr. Lopez stated that Procore is a construction management software being used by the District on several projects and has replaced E-Builder. The District purchased its own license allowing for better efficiency in controlling the data. Mr. Leiber stated that Procore integration with Oracle is envisioned, and an update on that issue will be provided at a future date. Mr. Leiber also stated that staff will be presenting alternative processes for future expenditure review at the January meeting of the Committee. Changes are appropriate following the transition to an in-house treasury structure and in consideration of new legislation that allows the Board to establish alternative payables processes. Procurement -Card (P-card) Expenditures: The Committee had no questions. COMMITTEE ACTION: Reviewed and recommended Board approval. b. Receive Budget -to -Actual Expenditure overview through the month of November 2024 Mr. Mizuno provided an overview of the Budget -to -Actual Expenditures for the Operations and Maintenance (O&M) and Sewer Construction Fund (SCF) through November 2024. O&M The total year-to-date expenditures through November were $35.3 million compared to the year-to-date estimated budget of $39.9 million resulting in a favorable variance of $4.6 million or 11.5 percent. He noted that the variance is a little higher than last month at $3.5 million or 10.8 percent. The two main drivers of this variance are salaries and benefits and natural gas. A discussion ensued regarding errors identified with Pacific Gas & Electric (PG&E's) consumption meter readings resulting in significant credits. Mr. Bailey asked how the error was caught. Mr. Norby stated that a recent analysis of energy use and carbon emissions for purposes of staying below the State carbon cap -and -trade limits showed unusual overall grid gas use patterns and prompted staff to review gas use. Separately, the Engineering Reliability group had noticed anomalies in PGE's metered gas use values going back several months, prompting questions to PGE on their meter's calibration status. He noted that a clearer picture of the actual numbers will emerge when the usage is updated within the next month. Mr. Bailey acknowledged staff for finding the error and asked if it was possible that this January 9, 2025 Special Board Meeting Agenda Packet - Page 81 of 93 Page 5 of 6 Finance Committee Minutes December 17, 2024 Page 4 may have happened before and if there was a way to audit other bills for potential over -billings. Mr. Leiber stated that this possibility can be discussed with the Internal Auditor, and that contract reviews are a common internal audit practice at other municipal utilities. Chair Pilecki noted for the benefit of Member McGill that the current vacancy factor assumed in the adopted budget is three percent. Staff will review this number for the next fiscal year's budget to determine if this factor needs to be adjusted in next year's budget. SCF The total authorized spend for the Capital fund is $131 million. The total actual spend was $31.7 million or 8.6 percent variance and is a contraction from the prior month. Mr. Mizuno noted that there were a few large projects contributing to the progression of the Capital program such as the Solids Handling project with total expenditures of $12.6 million, the Pumping Station Upgrades, Phase 2 project at $4.2 million, the Martinez Force Mains project at $2.8 million, and the Aeration Basin Diffusers project at $3.6 million. COMMITTEE ACTION: Reviewed and recommended Board receipt. 4. Other Items a. Receive PFM Asset Management (PFMAM) Other Post -Employment Benefits (OPEB) and Pension Prefunding Sub -trust Reports for the third quarter of calendar year 2024 Mr. Leiber provided a brief overview of the reports included in the agenda materials. He noted that the reports are different from what is normally received. Our provider PFMAM is experiencing transition delays from the recent acquisition by U.S. Bank. He emphasized that the quarterly reports are providing the essential information, and in terms of performance on Attachment 1 (included in the agenda material), the three-month performance for OPEB is at 5.85 percent and the pension is at 5.6 percent, which exceeded the targeted annual returns of 5.75 and 5.14 percent respectively. COMMITTEE ACTION: Received the report. b. Review Risk Management Loss Control Report as of December 2, 2024 Ms. Deutsch provided a brief overview of the report included in the agenda material and stated there were no new claims to discuss. COMMITTEE ACTION: Received the report. January 9, 2025 Special Board Meeting Agenda Packet - Page 82 of 93 Page 6 of 6 Finance Committee Minutes December 17, 2024 Page 5 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 Meeti 2025 Meeting Schedule — TBD 8. Adjournment — at 3:13 p.m. January 9, 2025 Special Board Meeting Agenda Packet - Page 83 of 93