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Home My WebLink About1994-12-21.., County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-B127 Telephone: (714) 962-2411 MINUTES OF FINANCE AND PERSONNEL COMMITTEE FILED MEETING DATE December 21, 1994, 5:30 P.M. In the Office of lhe Secretary County Sanitation District(s) No(s) ,;:. :/,,{ ~4,. '4· it/311/t/ JAN 111995 By ts: A meeting of the Finance and Personnel Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held on December 21, 1994, at 5:30 p.m., at the Districts' Administrative offices. The roll was called and a quorum declared present, as follows: Committee Directors Present: Peer A. Swan, Chairman Roger R. Stanton, Vice Chairman George Brown John C. Cox, Jr., Joint Chairman Jan Debay Burnie Dunlap James H. Flora John M. Gullixson Glenn Parker Wally Linn Thomas Saltarelli William G. Steiner Other Directors Present: John Collins Don Griffin Staff Present: Blake Anderson, General Manager Gary G. Streed, Director of Finance Gary E. Hasenstab, Director of Personnel Ed Hodges, Asst. Director of Operations Bob Ooten, Asst. Director of Maintenance Michael D. White, Controller Steve Kozak, Financial Manager Others Present Tom Woodruff, General Counsel Patti Gorczyca, Public Financial Management 4. Report of the Committee Chairman. Finance and Personnel Committee Chairman Peer Swan announced that he was resigning from the Chairmanship. Joint Chairman Cox then appointed Director George Brown to serve as Finance and Personnel Committee Chairman. Chairman Brown presided over the rest of the meeting. 5. Approval of Minutes. The draft minutes of the Finance and Personnel Committee meeting of November 16, 1994, were approved as submitted. Minutes of Finance & p , ,onnel Committee Page2 December 21, 1994 6. 7. 8. Update by staff and consultants on actions cohcerning developments of the County's Commingled Investment Pool. Staff and the team assembled to work out issues related to the County's Commingled Investment Pool updated the Committee on activities since the December 14th Board meeting and planned for the future. The Committee was briefed on the actions of the Orange County Investment Pool Committee and the emergency withdrawals of pre-petition funds approved and to be approved for the Districts. Property tax and user fee appropriations for December 23rd and 28th were reported to be segregated for the Districts. A revised cash flow projection indicating receipt of all post-petition property taxes and user fees, and 30% of the pre-petition cash balances, showed that all obligations could be met. The Committee also reviewed the immediate actions staff would be taking, as well as actions required prior to June 1, 1995. Consideration of selection of an independent investment advisor. At the Special December Board meeting, the Directors appointed a Districts' Treasurer and established specific short-term investment guidelines. Staff presented a Request for Proposals to provide professional investment advisory services for the Committee's review. Staff believes it is very important to conduct a thorough selection process in order to select a professional who shares the investment philosophy of the Directors. Staff requested that the Committee consider a motion directing staff to solicit proposals for professional investment advisory services. Recommendation A motion was made, seconded and unanimously approved to solicit proposals from independent investment advisors for review by staff, with final selection to be made by the Joint Boards. Consideration of selection of professional legal services of Bond Counsel. The Fiscal Policy Committee has, in the past, selected special bond counsel for each of the Districts' borrowing transactions. Currently, no special counsel has been officially retained, although staff has been utilizing the services of Orrick, Herrington & Sutcliffe, the counsel on our most recent issue. At the December 7th Special Board meeting, the Directors took an action to retain Brown & Wood as Orrick was perceived to have a conflict. Minutes of Finance & Pe,..1mnel Committee Page 3 ! December 21, 1994 9. General Counsel reported on changes since the special Board meeting and clarified that the Orrick conflict was only related to participation in any actions that might be adversarial to the County. Following additional discussions regarding the need for new financing, the relationships of various financing firms and the Districts' need for special bond counsel services, the Committee decided to defer selection of special bond counsel. Recommendation A motion was made, seconded and unanimously approved to select special bond counsel through the Request for Proposals process as a part of the formation of a team for the next financing. Consideration of cash management options. Staff and General Counsel reported to the Committee on some of the options for managing the Districts' cash receipts and balances. Options included managing all cash in-house including payroll, accounts payable check processing and investments, and continuing to utilize the County Treasurer and Auditor- Controller to provide some of these services. Staff distributed a brief report on the functions of the Auditor-Controller, Treasurer-Tax Collector, and Districts' staff regarding cash receipts, accounts payable and payroll. Most of the functions are already being performed by staff, with treasury functions being absorbed in accordance with the Boards' December action. Recommendation A motion was made, seconded and unanimously approved to bring the balance of the cash management functions in-house as soon as procedures, internal controls and check stock could be developed. In the meantime, staff was directed to work with the County agencies to ensure timely payments and asset control. 10. Review and discussion of Committee actions relative to Orange County Commingled Investment Pool and impact on Districts during 1994. At the regular December 14, 1994, Joint Board meeting Director Gullixson initiated a discussion of the role of the Fiscal Policy/Finance and Personnel Committee relative to the County Commingled Investment Pool and asked that the Committee consider additional discussion at its next meeting. Minutes of Finance & P 1onnel Committee Page4 December 21, 1994 Diredor Gullixson and the Committee members continued the discussion of reports to the Committee, Committee actions regarding the reverse repurchase program, and the Distrids' financing program in general. After the Committee discussed alleged conflicts of interest reported in the media regarding the County's financings, Director Gullixson and General Counsel were directed to review various legal firm relationships and to report to the Committee. 11. ADJOURNMENT The meeting was adjourned at approximately 7:45 p.m. GGS:lc J:\WPDOC\FIN\CRANE\FPCMTG\FPC92-94'MFPC12.94 Enclosures STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) Pursuant to California Government Code Section 54954.2, I hereby certify that the Notice and the Agenda for the Finance and Personnel Committee meeting held on December 21, 1994, was duly posted for public inspection in the main lobby of the Districts' offices on December 16, 1994. IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of December, 1994. Posted: ~ / 0 Penny Kyle, Secreta County Sanitation Dis ·cts N of Orange County, California I 1994, 1:10 AM. By: (~------------~-~7)~- J:IWPOOC\FINICRANEIFPC.MTGIFPC95\CERTOF.POS\CER1POS1.94 the Boards of Directors of 1,2,3,5,6, 7, 11, 13&14 12/21/94 AGENDA FINANCE AND PERSONNE-L COMM-ITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY, CALIFORNIA 92708 REGULAR MEETING WEDNESDAY, DECEMBER 21, 1994-5:30 P.M. I ~e~:·;;~;~;;~;.=;,;;;;:~;~ ~~~·1:;;.;:-··---1 hours prior to the meeting date and time above. All written materials relating to each agenda item are available for public inspection in the Office of the Board Secretary. In the event any matter not listed on this agenda is proposed to be submitted to the Committee for discussion and/or action, it will be done in compliance with Section 54954.2(b) as an r emergency item or that there is a need to take immediate action which need came to the attention of .!=====._ the Committee subsequent to the posting of the agenda, or as set forth on a supplemental agenda posted in the manner as above, not less than 72 hours prior to the meeting date. ••·•••••ra•..,•·•••••••••••••••••••·•••••.,.••••11•• ...... •••••·••ra• .. •••• .. • .. ••••••••••••• .... ••• .. • .. ••• .. •••••• .. • .. ••• .. •••••••••••••• .. •••• .... ••••••• ............. •••••••••••• ............ •••' •·••.-•••••••••••" (1) Roll Call (2) Appointment of Chairman pro tern, if necessary. (3) Public Comments: All persons wishing to address the Committee on specific agenda items or matters of general interest should do so at this time. As determined by the Chairman, speakers may be deferred until the specific item is taken for discussion and remarks may be limited to five minutes. Matters of interest addressed by a member of the public and not listed on this agenda cannot have action taken by the Committee except as authorized by Section 54954.2(b). 12/21/94 (4) The Committee Chairman, General Manager, Director of Finance, Director of Personnel and General Counsel may present verbal reports on miscellaneous matters of general interest to the Committee Members. These reports are for information only and require no action by the Committee Members. (a) Report of Committee Chairman (b) Report of General Manager (c) Report of Director of Finance ( d) Report of Director of Personnel (e) Report of General Counsel (5) Approval of draft Finance and Personnel Committee Minutes for Meeting of November 16, 1994. (6) Update by staff and consultants on actions concerning developments of the County's Commingled Investment Pool. (7) Consideration of selection of an independent investment advisor: (a) Staff Report (b) Discussion (c) Consideration of motion (8) Consideration of selection of professional legal services of Bond Counsel: (a) General Counsel Report (b) Discussion (c) Consideration of motion (9) Consideration of cash management options: (a) Staff Report (b) Discussion (c) Consideration of motion (10) Review and discussion of Committee actions relative to Orange County Commingled Investment Pool and impact on Districts during 1994: (a) Report by Director Gullixson re request to agendize this item (b) Discussion (c) Consideration of Committee recommendation -2- 12/21/94 (11) Closed Session. ••••·••••_,, ........... •-••• .-or,o; r•••••• •••,....••••••••• ••••••,. ................. , .................................................. ,. ................ •-•••·•• J ••••• .. •••• .. •·• ................. ,.,. .. ., •• .,,.-.,,. ••• ,. ........ ,., •• Closed Session: During the course of conducting the business set forth on this agenda as a regular meeting of the Committee, the Chairman may convene the Committee in closed session to consider matters of pending or potential litigation, or personnel matters, pursuant to Government Code Sections 54956.9, 54957 or 54957 .6. Reports relating to (a) purchase and sale of real property; (b) matters of pending or potential litigation; (c) employee actions or negotiations with employee representatives; or which are exempt from public disclosure under the California Public Records Act, may be l reviewed by the Committee during a permitted closed session and are not available for public !===. inspection. At such time as final actions are taken by the Committee on any of these subjects, . the minutes will reflect all required disclosures of information . ................... ·-··•·-· ........................................ _ ................................ .., ....... ,._. ________ ........................... -... -..... ___ ., ____ ................................................ ,. ...... ····" " ~, . " . (a) Convene in closed session, if necessary (b) Reconvene in regular session. (c) Consideration of action, if any, on matters considered in closed session. ( d) Report on discussion taken in closed session, as required. (12) Other business, if any. (13) Matters which a Director would like staff to report on at a subsequent meeting. (14) Matters which a Director may wish to place on a future agenda for action and a staff report. (15) Consideration of upcoming meeting dates. (16) Adjourn. ••·• ••• ••r•••••••1 •1 n1 .................. ,., .................... .,. .•.•..•. ••·••••••• •·• , ..... ••••·•••·• ••-••••• .... ., •c-.••·•••••• .. , .... •..• .. ••••••------••••..,_ ,,•,•·•••••·•·••·•••••••••••·•"'••••••• .. •••.,. • ' •• • I • , ,~ • ) ' ' , ', • • " , • •• • • • ' .. . . . . . . Notice to Committee Members: If you have any questions regarding the Agenda, or wish to place items on the Finance and Personnel Committee Agenda, Committee members should contact the Committee Chair or Secretary ten days in advance of the Committee meeting. Committee Chair: Peer Swan (714) 720-1714 Secretary: Lenora Crane (714) 962-2411, Ext. 2500 (714) 962-3954 (FAX) j = . . ••••·•~•-.... • a ,, ... .._.L ............ n1•c-.•.• .... • • •••••--•••• \ ................................................................. , .............................. , .... 1 ............ r ................... , ............ ~-, ....................... •••••••••••••••.•••I -3- FINANCE & PERSONNEL COMMITTEE DATE 12-21-94 COMMITTEE MEMBERS SWAN (Chair)(VJC) •••••••••••••••••••••••••.•• STANTON (Vice Chair) ••••••••••••••••••••••••• BROWN ..............••....•.•............... DEBAY ...................................... . DUNLAP •.............•...................... FLORA ...................................... . GULLIXSON •••••••••••••••••••••••••••••••••• LINN ................•.........•.............. PARKER ...............•......•........•..... SALTAREW ................................. . STEINER ••••.•••••••••••••••••••••••••••••••• COX (JC) ••••••••••••••••••••••••••••••••••••• OTHER DIRECTORS COLLINS ••••••••••••••••••••••••••••••••••.•• GRIFFIN •••••••••••••••••••••••••••••••••••.•• STAFF ANDERSON STREED ......... __ _ HASENSTAB •••••• __ _ HODGES ......... __ _ OOTEN .......... __ _ UNDER •••••••••• __ _ NELLOR ••••••••• __ _ KOZAK •••••••••• __ _ WHITE ••••••••••• __ _ ROLL1.115 TIME _____ _ ADJOURN. ___ _ OTHERS TOM WOODRUFF, GEN'L. COUNSEL PAUL WEBBER, ESQ. • • • • • • • • • • • • • __ _ LUCINDA "CINDY" DENNIS, ESQ. • • • __ _ PATTI GORCZYCA • • • • • • • • • • • • • • • • __ _ ' J FINANCE AND PERSONNEL COMMITTEE Agenda Item (5): Summary AGENDA FOR DECEMBER 21, 1994 Approval of the Finance and Personnel Committee Minutes of November 16, 1994 Attached is a draft of the Finance and Personnel Committee Minutes of November 16, 1994, for approval by the Committee. Staff Recommendation These draft minutes were presented to the November Executive Committee and the December Joint Boards meeting. Approval by the Finance and Personnel Committee is the only action required. J:\WPDOC\FINICRANEIFPC.MTGIFPC82-8411TEM12.IMA County Sanitation Districts of Orange County, California P.O. Box 8127 • 10844 Ellis Avenue Fountain Valley, CA 92728-8127 Telephone: (714) 962-2411 MINUTES OF FINANCE AND PERSONNEL COMMITTEE MEETING DATE November 16, 1994, 5:30 P.M. A meeting of the Finance and Personnel Committee of the County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California was held on November 16, 1994, at 5:30 p.m., at the Districts' Administrative offices. The roll was called and a quorum declared present, as follows: Committee Directors Present: Peer A. Swan, Chairman Roger R. Stanton, Vice Chairman George Brown John C. Cox, Jr., Joint Chairman Jan Debay James H. Flora John M. Gullixson Evelyn Hart Wally Linn Irv Pickler Thomas Saltarelli William G. Steiner Grace H. Winchell Committee Directors Absent: Burnie Dunlap Glen Park.er Staff Present: Blake Anderson, General Manager Gary G. Streed, Director of Finance Gary E. Hasenstab, Director of Personnel Ed Hodges, Asst. Director of Operations Bob Ooten, Asst. Director of Maintenance John Linder, Director of Engineering Michael D. White, Controller Steve Kozak, Financial Manager Others Present: John Coan, PaineWebber Jeff Scruggs, PaineWebber 4: REPORT OF THE DIRECTOR OF FINANCE. Gary Streed, Director of Finance, introduced John Coan and Jeff Scruggs of Paine Webber who attended the meeting to discuss item 13. 5: APPROVAL OF MINUTES. The draft minutes of the Finance and Personnel Committee meeting of October 19, 1994, were approved as submitted. Minutes of Finance & P onnel Committee Page2 November 16, 1994 6: 7: DIRECTORS' COMMITTEE NOTEBOOK The revised draft of the Directors' Committee Notebook was presented by Blake Anderson, General Manager. The Notebook will consolidate the General Information for Directors Notebook and will include a page of Committee member and staff names. The text will refer to position titles rather than names to simplify and reduce the number of future editions. Blake asked for comments on both style and substance within three weeks so that the final Notebook could be available for the January Committee meetings. REVIEW OF THE DISTRICTS' POLICIES REGARDING ACCRUAL AND USE OF PAID TIME OFF OR LEAVE. Gary Hasenstab, Director of Personnel, reviewed the Districts' policies regarding accrual and use of paid time off or leave in accordance with the Committee's request at the last Finance and Personnel Committee meeting. Provisions establishing the policies and procedures for paid leave are set forth in Districts' Resolution No. 79-20, Providing for Classification, Compensation and Terms of Employment; and 79-21, Providing for Rules and Regulations Regarding Terms and Conditions of Employment, as amended; and in Memoranda of Understanding with the various employee organizations. There are accrual limits for each of the categories of paid leave. Once the limit is reached, the Payroll Office annually pays the employee for the hours in excess of the limits. This policy has not been consistently followed in all groups in the past with regard to vacation accrual, and has resulted in a total of 47 employees with current balances in excess of 100 hours. Seven employees have balances in excess of 300 hours; one of these is a result of a conversion from Personal Leave, a special case. It should be noted that Districts' employees are covered under the provisions of the 1937 Retirement Act, which does not provide for the inclusion of payoff of accrued leave balances in the final year or final three years' earnings used to determine retirement benefits as in the case with the Public Employees Retirement System (PERS). Thus, salary "spiking" to increase retirement benefits is DQ1 possible. Committee Action The Committee directed staff to include a one page summary of leave policies in their section of the Directors' Committee Notebook and to include the policies as a topic of discussion for the next MOU process. ._ Minutes of Finance & Peynnel Committee Page3 November 16, 1994 8: CONSIDERATION OF MOTION AUTHORIZING STAFF TO PREPARE A RESOLUTION TO AMEND RESOLUTION NO. 79-20. AS AMENDED. TO ESTABLISH A CONFERRAL OF LEAVE POLICY. Gary Hasenstab, Director of Personnel, reviewed the Districts' conferral of leave policy which was deferred last month pending the above review of all leave policies. Four Districts' employees are confronting or experiencing catastrophic medical conditions involving either themselves or their children that will result in a depletion of all of their accrued paid leave. Several of their co-workers have expressed an interest in giving a portion of their own accrued paid leave to these individuals to at least partially offset their loss of pay, as well as to offer them support through their difficult experiences. The Districts' current policy would not allow for the donation of paid leave, including vacation, personal leave or compensatory time off, to another employee who is without paid leave. For that reason, staff recommended adoption of a conferral of leave policy. The policy provides that employees may, on a one-time basis, elect to donate accrued and unused personal leave, vacation leave or compensatory time off to an individual employee who has depleted his or her own paid leave as a direct result of a catastrophic medical condition. All such time must be conferred on a form provided by the Director of Personnel. Committee Recommendation The Finance and Personnel Committee recommends the Executive Committee consider approval of a resolution to amend Resolution No. 79-20, as amended, to establish the enclosed conferral of leave policy. 9: STATUS REPORT ON THE USE OF EXECUTIVE SEARCH FIRMS TO ASSIST WITH PERSONNEL RECRUITMENT. At the last Committee meeting the Directors asked that a discussion of the use of executive search firms be placed on the agenda. Gary Hasenstab, Director of Personnel, reported that it has not been the Districts' practice in the past to employ executive search firms or other outside means of sourcing candidates. However, it would be quite appropriate to do so in situations where a more traditional approach of using our own recruitment staff would not be an efficient use of our resources, would not have the credibility that an independent firm would offer, or where Districts' staff may not have sufficient expertise to successfully conduct a technical recruitment where identification of top candidates is particularly difficult. Minutes of Finance & P '\Onnel Committee Page4 November 16, 1994 The Personnel Department budget does not include executive search activities other than through a professional services arrangement. Due to the unpredictability in determining the need for such funds, it may be prudent to consider the advisability of engaging an executive search firm on a case-by-case basis. Committee Action The Committee directed staff to utilize the services of an executive search firm in certain situations and to modify the professional services budget to provide for these services in future years. 10: CONSIDERATION OF POLICIES AND PROCEDURES MANUALS FOR THE DISTRICTS' FINANCIAL PROGRAMS. Final draft versions of the policies and procedures manuals for the Reverse Repurchase Program, the Taxable Commercial Paper Program, and the Certificates of Participation Program were submitted for the Committee's consideration. Steve Kozak, Financial Manager, reviewed the manuals and answered questions from Committee members. Committee Action The Committee received and approved the financial program policies and procedures manuals for the Reverse Repurchase Program, the Commercial Paper Program, and the Certificates of Participation Program. Staff was directed to prepare a summary to put into all of the Directors' Committee Notebooks and to include the entire manuals in the Finance and Personnel Committee Notebooks. 11: STATUS REPORT ON TAXABLE COMMERCIAL PAPER PROGRAM. Steve Kozak, Financial Manager, presented an information-only report covering the current status of the Districts' taxable Commercial Paper Program which earned $2,342,592 from inception, January 19, 1994, through November 8, 1994. 12: STATUS REPORT ON REVERSE REPURCHASE AGREEMENTS. Steve Kozak, Financial Manager, presented an information-only report covering the current status of the Districts' Reverse Repurchase Agreement Program. In 1993, the Boards authorized two $50 million Reverse Repurchase Agreements (Reverse Repos) through the County Treasurer's Office. • Minutes of Finance & Per"rnel Committee Pages November 16, 1994 Since the Committee's last meeting, the Treasurer's Office has completed a rollover for each of the Districts' Reverse Repos. The results of these rollovers are summarized as follows: Oct. 26 Nov.3 5.10% 4.94% 4.99% 5.04% $92.60 Nov. 28 $90.00 Dec. 2 33 29 0.11% (0.10%) Since the program began in April 1993, the Reverse Repo program has earned $1,635,519 and continues to earn interest on deposits with the County Treasurer. 13: ESCROW RESTRUCTURING PROGRAM, SERIES 1992 REFUNDING CERTIFICATES OF PARTICIPATION. A proposal to restructure the escrow portfolio for the Series 1992 Refunding Certificates of Participation (COPs) was presented by Steve Kozak and John Coan of PaineWebber and considered by the Committee . The escrow restructuring would generate an estimated $300,000 in earnings for the Districts with minimal risk. Committee Recommendation The Committee directed staff to retain PaineWebber and special counsel to assist with the review of the Series 1992 COP Escrow Restructuring proposal, and to prepare the necessary documentation for the Finance and Personnel Committee to implement the escrow restructuring. 14: CONSIDERATION OF QUARTERLY STAFF SUMMARY REPORT OF TRAINING AND TRAVEL COSTS FOR THE QUARTER ENDED SEPTEMBER 30, 1994. Beginning in 1993-94, the Joint Boards asked this Committee to review a staff report summarizing training and travel expenses each quarter. Accordingly, the report for the quarter ended September 30, 1994, is attached. Travel to inspect equipment fabrication for a capital project and the initial training required for a new facility may be appropriately capitalized and charged to that project. Such costs are paid through the respective capital fund, generally the Capital Outlay Revolving Fund (CORF). In order to fully report to the Committee, these charges were captured and included in the report. For this reason, the costs in the report are not the same as those in the quarterly JO budget review. Gary G. Streed, Director of Finance, presented a summary report of training and travel costs for the quarter ended September 30, 1994. All costs were included and total costs are within budget projections. Minutes of Finance & P 1onnel Committee Page6 November 16, 1994 15: CONSIDERATION OF JOINT WORKS BUDGET REVIEWS PREPARED BY STAFF FOR THE QUARTER ENDED SEPTEMBER 30, 1994. Gary G. Streed, Finance Director, presented the enclosed Joint Works Budget reviews for the quarter ended September 30, 1994 to the Committee as follows: Joint Works Operating Costs (JO), the Joint Works Capital Improvement Program (CORF), and the costs of the workers' compensation, public liability and health plan self-insurance funds. With one-fourth of the year gone, 20.81 % of the net joint operating budget has been expended. Net costs are down $537,772 or 4.96%, compared with the same period last year. This cost decrease is primarily due to decreases in the biosolids handling costs (which are not expected to last to year end), reduced electricity and natural gas purchases, and increased revenues from other agencies served on a contractual basis. Small increases and decreases in other categories make up the balance. At the same time, flows have increased 6.08%. Therefore, the net decrease in costs and the increase in total flows have resulted in a $54.95 per million gallons decrease in the unit cost to treat and dispose of sewage, to $472.99 per million gallons. Costs are expected to increase over the balance of the year. Joint Works construction projects for the first three months are lower than originally scheduled, running at 7% of the 1994-95 budget or $4.9 million. We continue to receive excellent bids on new projects, reflecting the slow economy. Several projects have completed the design stage and are nearly ready to be awarded, and progress payments on these projects will increase CORF outlay over the remainder of the year. The self-funded insurance programs are operating within their budgets. The indemnity medical plan was converted from self-funded to purchased during 1993-94. 16: CONSIDERATION OF REQUEST FROM KPMG PEAT MARWICK LLP FOR AN INCREASE IN THE MAXIMUM FEES FOR THE 1993-94 FINANCIAL AUDIT FROM $46,800 PLUS EXPENSES TO $63,861 PLUS EXPENSES, AN INCREASE OF $17,061. The Finance Director reported that KPMG Peat Marwick has provided independent professional audit services to the Districts since 1975. In February, the Fiscal Policy Committee directed staff to obtain a proposal for KPMG to extend their services through the 1993-94 audit. At the May Joint Board meeting, KPMG was retained for an amount not to exceed $46,800 plus expenses for 1,095 hours in accordance with a Finance and Personnel Committee recommendation. The prior year's audit fees for 1, 192 hours were $43,750 plus expenses. Minutes of Finance & Per7nnel Committee Page? November 16, 1994 KPMG has incurred charges for the ·1993-94 audit for 1,834 hours or $76,241 plus expenses. They have invoiced the Districts for a total of $63,861 for their fees, an increase in the authorized amount of $17,061. KPMG and staff agree that the hours overrun is attributable to the change to a CAFR format subsequent to KPMG's proposal, audit adjustments required to report in accordance with GAAP, and a complete change in audit staff. The hours billed to the Districts can be summarized as: Hours COP Refunding & Other Entries 76 Equity and Fund Balance Adjustments 27 Accounts Receivable Issues 57 Fixed Assets & Capitalized Interest 48 CAFR Format Change & Additional Review 115 Other Adjustments ___Q Total 329 By paying the entire adjustment requested, the Districts will have paid for 329 of the 739 hours incurred in excess of the proposal, or 45% of the excess. The KPMG average rate for the 1,424 hours would then be $44.85 per hour, or 34% of their standard billing rate. Recommended Action The Finance and Personnel Committee recommends a change to the service agreement with KPMG Peat Marwick for professional audit services for the 1993-94 fiscal year increasing the maximum authorized amount from $17,061.00 to $63,861.00 plus out-of-pocket expenses at cost. 17: CONSIDERATION OF PROPOSED STAFFING CHANGES FOR PLANT OPERATIONS AND APPROVAL OF AN AMENDMENT TO THE CLASSIFICATION AND COMPENSATION RESOLUTION. Bob Ooten, Assistant Director of Operations, reviewed proposed staffing changes which had been approved by the Fiscal Policy Committee during the 1994-95 budget process. The changes were later held in abeyance by the Executive Committee pending organization and management studies by Ernst & Young. Mr. Ooten reviewed those previously approved requests which are now needed to improve the productivity of the Operations Department and to properly classify the work that is being done. The attached proposal is for a net decrease of two authorized positions and an annual salary budget savings of $56, 136 at the top of the ranges and at full employment. Minutes of Finance & P ,onnel Committee Page8 November 16, 1994 Six of the changes involve current employees, three are the deletion of currently vacant positions, and one is an additional position. The already budgeted maximum cost of the addition is $76,320. Committee Recommendation The Finance and Personnel Committee recommends an amendment to the Classification and Compensation Resolution for a net decrease of two positions and a maximum annual salary budget savings of $56, 136.00 which was included in the 1994-95 budgets. 18: CONSIDERATION OF CASH AWARDS AND CERTIFICATES OF COMMENDATION FOR PERSONAL RESPONSIBILITY IN DAILY EFFORT (PRIDE} SUGGESTIONS NOS. 388,394 AND 397. During the past few months, several PRIDE suggestions have been submitted for consideration and evaluation. The review has been completed and recommendations for certificates and cash awards totaling $364.00 in accordance with the Board-approved PRIDE program, are summarized in the attached staff report. Committee Action The Finance and Personnel Committee authorized certificates and commendations and cash awards totaling $364.00 to the four employees who submitted the three PRIDE suggestions. 19: ADJOURNMENT The meeting was adjourned at 7:10 p.m. GGS:lc J:\WPDOC\FIN\CRANE\FPC.MTGIFPC92-941MFPC11.94 Enclosures FINANCE AND PERSONNEL COMMITTEE Agenda Item (6): Summary AGENDA FOR DECEMBER 21, 1994 Update by staff and consultants on actions concerning developments of the County's Commingled Investment Pool Staff and the team assembled to work out issues related to the County's Commingled Investment Pool will update the Committee on activities since the December Board meeting and planned for the future. Staff Recommendation Information item only. J:\WPOOC\FINICRANEIFPC.MTG\FPC82-9411TEM12.IMB FINANCE AND PERSONNEL COMMITTEE Agenda Item (7): Summary AGENDA FOR DECEMBER 21, 1994 Consideration of selection of an independent investment advisor At the Special December Board meeting, the Directors appointed a Districts' Treasurer and established specific short-term investment guidelines. Staff has prepared a Request for Proposals to provide professional investment advisory services for the Committee's review. Staff believes it is very important to conduct a thorough selection process in order to select a professional who shares the investment philosophy of the Directors. Staff Recommendation Consideration of a motion directing staff to solicit proposals for professional investment advisory services. J:IWPOOC\FINICRANEIFPC.MTGIFPC82-&4\ITEM12.IMC FINANCE AND PERSONNEL COMMITTEE Agenda Item (8): Summary AGENDA FOR DECEMBER 21, 1994 Consideration of selection of professional legal services of Bond Counsel The Fiscal Policy Committee has, in the past, selected special bond counsel for each of the Districts' borrowing transactions. Currently, no special counsel has been officially retained, although staff has been utilizing the services of Orrick, Herrington & Sutcliffe, the counsel on our most recent issue. At the December 7 Special Board meeting, the Directors took an action to retain Brown & Wood as Orrick was perceived to have a conflict. General Counsel will report on changes since the special meeting and will make a recommendation. Staff Recommendation Consideration of a motion to select professional special bond counsel as recommended by the General Counsel. J:\WPOOC\FINICRANEIFPC.MTGIFPC92-94\ITEM12.94E FINANCE AND PERSONNEL COMMITTEE Agenda Item (9): Summary AGENDA FOR DECEMBER 21, 1994 Consideration of cash management options Staff and General Counsel will report to the Committee on some of the options for managing the Districts' cash receipts and balances. Options include managing all cash in-house including: payroll, accounts payable check processing and investments, and continuing to utilize the County Treasurer and Auditor-Controller to provide some of these services. Staff Recommendation Consideration of motion directing staff to implement one of the cash management options. J:IWPDOC\FINICRAN0FPC.MTGIFPC82-94\ITEM12.94F FINANCE AND PERSONNEL COMMITTEE AGENDA FOR DECEMBER 21, 1994 Agenda Item (10): Review and discussion of Committee actions relative to Orange County Commingled Investment Pool and impact on Districts during 1994 Summary At the regular December 14, 1994, Joint Board meeting Director Gullixson initiated a discussion of the role of the Fiscal Policy/Finance and Personnel Committee relative to the County Commingled Investment Pool. After some discussion, the matter was referred to this Committee for further review. Staff Recommendation N/A I I December 16, 1994 ') ') COUNTY SANITATION DISTRICTS OF ORANGE COUNTY, CALIFORNIA P.O. BOX 8127, FOUNTAIN VALLEY, CALIFORNIA 92728-8127 10844 ELLIS, FOUNTAIN VALLEY, CALIFORNIA 92708-7018 (714) 962-2411 NOTICE OF MEETING FINANCE AND PERSONNEL COMMITTEE COUNTY SANITATION DISTRICTS NOS. 1, 2, 3, 5, 6, 7, 11, 13 AND 14 OF ORANGE COUNTY, CALIFORNIA WEDNESDAY. DECEMBER 21, 1994-5:30 P.M. DISTRICTS' ADMINISTRATIVE OFFICES 10844 ELLIS AVENUE FOUNTAIN VALLEY. CALIFORNIA 92708 A regular meeting of the Finance and Personnel Committee of the Joint Boards of Directors of County Sanitation Districts Nos. 1, 2, 3, 5, 6, 7, 11, 13 and 14 of Orange County, California, will be held at the above location, time and date. J:\WPOOC\FIN\CRANE\R'C.MTG\FPC96\NOT1CEINOTICE12.IM December 16, 1994 COUNTY SANITATION DISTRICTS of ORANGE COUNTY. CALIFORNIA ! 10844 ELLIS AVENUE P.O BOX 8127 FOUNTAIN VALLEY, CALIFORNIA 9272e (714) 962-2411 FINANCE AND PERSONNEL COMMITTEE MEETING DATES Finance and Action Items to Action Items to Joint Personnel Committee Executive Committee Board Meeting Meetings Meeting December December 21, 1994 None Scheduled January 11, 1995 January January 18, 1995 January 25, 1995 February 8, 1995 February February 15, 1995 February 22, 1995 March 8, 1995 March March 15, 1995 March 22, 1995 April 12, 1995 April April 19, 1995 April 26, 1995 May 10, 1995 May May 17, 1995 May 24, 1995 June 14, 1995 June June 21, 1995 June 28, 1995 July 12, 1995 July July 19, 1995 July 26, 1995 August 9, 1995 August None Scheduled None Scheduled September 13, 1995 September September 20, 1995 September 27, 1995 October 11, 1995 October October 18, 1995 October 25, 1995 November 8, 1995 November November 15, 1995 None Scheduled December 13, 1995 J:\WPDOC\RN\CRANE\FPC.MTG\FPC96\NOTICE\NOTICE12.94