Minutes - Rancho California Water District

MINUTES OF THE JOINT REGULAR MEETING OF THE
FINANCE AND AUDIT COMMITTEE AND SPECIAL MEETING
OF THE BOARD OF DIRECTORS OF THE
RANCHO CALIFORNIA WATER DISTRICT
Thursday, January 7, 2016
8:30 a.m.
DIRECTORS PRESENT:
Steve Corona
Lisa Herman
William Plummer
STAFF PRESENT:
Jeff Armstrong, General Manager
Andy Webster, Chief Engineer
Rick Aragon, Director of Finance/Treasurer
Jason Martin, Director of Administration
Rich Ottolini, Interim Director of Operations & Maintenance
Heath McMahon, Construction Contracts Manager (left at 9:33 a.m.)
Kathy Naylor, Finance Manager
Mike Calvert, Operations Project Manager
Corey Wallace, Engineering Manager – CIP & Development
Tim Carlisle, Field Services Manager – Construction
Darren Milner, Field Services Manager – Facilities
Vicki Browder, Budget/Debt Administrator
Dave Morrison, Safety/Risk Officer
Billy Browder, Purchasing Supervisor
Samantha Brown, Accountant
Milin Ream, Sr. Administrative Assistant/Recording Secretary
OTHERS PRESENT:
Ben Drake, RCWD Board of Directors
John Hoagland, RCWD Board of Directors
Danny Martin, RCWD Board of Directors
Bill Wilson, RCWD Board of Directors
Robert Porr, Fieldman, Rolapp and Associates
This Committee meeting is also noticed as a special meeting of the Board of Directors
because a quorum of the Board may be present. Members of the Board who are not
members of the Committee may attend and participate in the meeting, but only
members of the Committee may make, second, or vote on any motion or other action of
the Committee. Any actions taken pursuant to this agenda will be actions within the
purview of the Committee and shall be approved by an affirmative vote of a majority of
the quorum of the Committee. The Committee is not empowered to act for or on behalf
of the Board or the District unless exercising delegated authority from the Board. Any
actions taken by the Committee shall be deemed recommendations of the Committee
for future consideration by the Board at a separately noticed regular or special meeting
of the Board of Directors. The Board of Directors retains all powers, privileges, and
duties to exercise and perform the business of the District.
Upon request, this agenda will be made available in appropriate alternative formats to
persons with disabilities, as required by Section 202 of the Americans with Disabilities
Act of 1990. Any person with a disability who requires a modification or accommodation
in order to participate in a meeting should direct such request to the District Secretary at
(951) 296-6900 at least 48 hours before the meeting, if possible.
The meeting was called to order at 8:30 a.m. by Director Herman.
ADDITIONS TO AGENDA
Items may be added to the Agenda in accordance with Section 54954.2(b)(2) of
the Government Code (Brown Act), upon a determination by a two-thirds vote of the
members of the legislative body present at the meeting, or, if less than two-thirds of the
members are present, a unanimous vote of those members present, that there is a need
to take immediate action and that the need for action came to the attention of the
District after the Agenda was posted.
There were no additions to the Agenda.
APPROVAL OF AGENDA
Director Herman called for approval of the Agenda of the Regular Meeting of the
Finance and Audit Committee of the Rancho California Water District of January 7, 2016 as
presented.
MOTION:
Director Corona moved to approve the Agenda of the Regular Meeting of
the Finance and Audit Committee of the Rancho California Water District
of January 7, 2016. Director Plummer seconded the motion, and it carried
unanimously.
PUBLIC COMMENT
An opportunity was given for any person to address the Finance and Audit
Committee (Committee) upon any subject not identified on the Agenda, but within the
jurisdiction of the Rancho California Water District (RCWD/District). For items not listed
on the agenda, the Brown Act imposes limitations on what the Committee may do
January 7, 2016
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Finance and Audit Committee
during public comment. As to matters on the Agenda, persons will be given an
opportunity to address the Committee when the matter is considered.
There was no public comment.
Item 1.
Letter of Credit Extension for Community Facilities District No. 89-5
Refunding Bonds
Director of Finance/Treasurer Rick Aragon addressed the Finance and Audit
Committee (Committee) to introduce the Agenda item and advised that Rancho
California Water District (RCWD/District) has an opportunity to move forward with an
extension on the Letter of Credit (LOC) for Community Facilities District (CFD) No.89-5.
At this time, Mr. Aragon invited Robert Porr with Fieldman, Rolapp & Associates
(FRA) to continue staff’s presentation.
Utilizing a PowerPoint presentation, MR. Porr provided a brief background on the
LOC as follows:
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Wells Fargo Bank issued LOC in the amount of $16 million that expires
August 25, 2017;
The LOC provides security and liquidity for the Rancon Special Tax
Bonds;
The current cost for the LOC is 45 basis points which is approximately
$80,000 annually;
LOC costs are expected to rise in the near future; and
Wells Fargo Bank has offered to extend the LOC for 2 years at current
cost annually.
Next, Mr. Porr discussed the options reviewed and analyzed:
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Procure bid from banks providing LOCs, analyze bids, negotiate terms
and conditions, and close;
If Wells Fargo Bank is not the successful bidder, the Bonds will need to be
remarketed ;
A remarketing will necessitate processing a new transaction with fees for
bond counsel, remarketing agent, credit rating agencies, financial advisor,
as well as staff time;
Estimated cost of a remarketing are $250,000; and
Cost to renew with Wells Fargo Bank is $16, 2015.
Following the presentation, staff welcomed inquires by the Committee. Brief
discussion ensued between the Committee and staff with regard to an increase in fees.
Responding, Mr. Porr indicated that only the LOC fees are expected to rise and FRA
does not foresee an increase in interest rates which would have a significant impact at
this time.
January 7, 2016
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Finance and Audit Committee
MOTION:
Director Corona moved to recommend Board adoption of the proposed
documents to expend the current Letter of Credit and approval of related
costs. Director Plummer seconded the motion, and it carried unanimously.
Item 2.
Review of Financial Statements – November 30, 2015
A.
B.
C.
Statement of Net Position
Statement of Revenues, Expenses and Changes in Net
Position
Statement of Cash Flows
Presented for the Finance and Audit Committee’s review and acceptance were
the Rancho California Water District (District) Financial Statements of November 30,
2015. Included in the Committee information packets, which were received by
Committee members prior to the meeting, were copies of the District Financial
Statements of November 30, 2015, and a report which included, a written summary and
graphic illustrations of operating and non-operating revenues, and expenses for the
month of November 2015.
Following review and discussion of the November 30, 2015 Financial
Statements, Director Herman entertained a motion from the Committee.
MOTION:
Director Corona recommended the Board of Directors approval of the
November 30, 2015 Financial Statements. Director Plummer seconded
the motion, and it carried unanimously.
Item 3.
Review of Treasurer’s Report; Certification for Cash Sufficiency and
Related Investment Activity Data, as of November 30, 2015
Presented for the Finance and Audit Committee’s review and acceptance were
the Rancho California Water District (District) Treasurer’s Report and Certification of
Cash Sufficiency for November 2015. Included in the Committee information packets,
which were received by Committee members prior to the meeting, were copies of the
Treasurer’s Report and Certification of Cash Sufficiency, Cash Reserve, Compliance
and Treasury Fund reports, and individual investment activity reports for the month of
November 2015.
Following review, Director Herman entertained a motion from the Committee.
MOTION:
January 7, 2016
Director Corona recommended the Board of Directors approval of the
November 30, 2015 Treasurer’s Report. Director Plummer seconded the
motion, and it carried unanimously.
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Finance and Audit Committee
Item 4.
Review of Outside Contracts, Capital Projects, and Purchasing
Reports
The Finance and Audit Committee accepted the Outside Contracts Summary
Report and Capital Projects Status Report dated November 30, 2015, as presented,
without discussion.
Item 5.
Review and Ratification of the Register of Audited Demands for the
Period November 26, 2015 through December 23, 2015
The Finance and Audit Committee (Committee) reviewed the Register of Audited
Demands for the period November 26 through December 23, 2015. Accounting Manager
Kathy Naylor reviewed the Register of Audited Demands, and provided further clarification
on Warrant Nos. 135473, 135497, 135664, 135506, 135527, 135529, 135540, 135553,
135559, 135579, 135581, 135584, 135742, 135592, 135602, 135606, 135617, 135633,
135649, 135814, 135686, 135728, 135746, 135757, 135777, and 135784. The
Committee accepted the Register of Audited Demands as presented and forwarded it to
the Board of Directors for approval.
MOTION:
Director Corona recommended the Board of Directors approval of the
Register of Audited Demands for the period November 26 through
December 23, 2015, totaling $5,375,287.43. Director Plummer seconded
the motion, and it carried unanimously.
Item 6.
Adjournment
There being no further business to come before the Committee, the meeting
adjourned at 9:28 a.m.
/s/Milin J. Ream
Milin J. Ream, Recording Secretary
January 7, 2016
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Finance and Audit Committee