AGENDA BUDGET/PERSONNEL COMMITTEE (BPC)

Transcription

1 AGENDA BUDGET/PERSONNEL COMMITTEE (BPC) Dennis Allion, Chair Linda Grier, Gloria De La Rosa, Tom Moore [Ron Stefani Alternate] DATE: Thursday, January 11, 2018 TIME: LOCATION: 12:30 pm Admin Conference Room 5 Harris Court, Building D Monterey, CA CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS Anyone wishing to address the Committee on matters not appearing on the Agenda may do so now for not more than three (3) minutes. Comments on any other matter listed on the Agenda are welcome at the time the matter is being considered by the Committee. 4. CONSIDER APPROVAL OF BPC MINUTES OF NOVEMBER 9, 2017 (pgs 1-4) 5. BUDGET AMENDMENTS AND RESERVE UPDATE (pgs 5-6) 6. UPDATE ON HISTORY OF AGENCY DEBT (pgs 7-8) 7. COST ALLOCATION PLAN OVERVIEW (pgs 9-22) 8. UPDATE ON PREPARATION OF FISCAL YEAR 2018/19 BUDGET (pg 23) 9. CONSIDER RECOMMENDING APPROVAL OF A RESOLUTION NOTIFYING THE LOCAL AGENCY INVESTMENT FUND (LAIF) OF OUR NAME CHANGE, AND IDENTIFYING THE AGENCY POSITIONS THAT ARE AUTHORIZED TO ORDER THE DEPOSIT OR WITHDRAWAL OF MONIES IN LAIF (pgs 24-28) 10. CONSIDER RECOMMENDING RATIFICATION OF BUDGET ADJUSTMENT FOR $4,112,541 TO SUPPORT PAYMENT OF 50% OF REIMBURSEMENTS FROM THE STATE REVOLVING FUND LOAN TO MPWMD (pgs 29-30) 11. STAFF REPORTS 12. COMMITTEE MEMBER COMMENTS/REPORTS Committee Members may ask a question for clarification, make a brief announcement or make a brief comment or report on his or her own activities within the jurisdiction of the committee. No discussion or action is appropriate other than referral to staff for consideration or setting a matter as a future agenda item. 13. ADJOURNMENT

2 1 MINUTES BUDGET/PERSONNEL COMMITTEE Thursday, November 9, :34 pm to 1:38 pm 5 Harris Court, Building D Monterey, California CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS Anyone wishing to address the Committee on matters not appearing on the Agenda may do so now for not more than three (3) minutes. Comments on any other matter listed on the Agenda are welcome at the time the matter is being considered by the Committee. 4. BUDGET AMENDMENTS AND RESERVE UPDATE 5. RECEIVE FISCAL YEAR 2016/17 DRAFT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT 6. CONSIDER RECOMMENDING APPROVAL OF A RESOLUTION AUTHORIZING TURNKEY CONTRACT FOR RETROFITTING OF TRICKLING FILTERS WITOUT FORMAL COMPETITIVE BIDDING AND RECOMMEND AWARD OF TURNKEY PROJECT CONTRACT TO MISCOWATER FOR CP303 TRICKLING FILTERS UPGRADE PROJECT, PHASE 1 7. CONSIDER RECOMMENDING AWARD OF CONTRACT TO ALL AMERICAN AVIAN ABATEMENT FOR SEAGULL ABATEMENT SERVICE 8. STAFF REPORTS 9. COMMITTEE MEMBER COMMENTS/REPORTS Committee Members may ask a question for clarification, make a brief announcement or make a brief comment or report on his or her own activities within the jurisdiction of the committee. No discussion or action is appropriate other than referral to staff for consideration or setting a matter as a future agenda item. 10. ADJOURNMENT PRESENT: Budget/Personnel Committee Dennis Allion, Chair Gloria De La Rosa Linda Grier Tom Moore ABSENT: None PRESENT: MRWPCA Staff: Joint Powers Authority Member Entities: Boronda County Sanitation District, Castroville Community Services District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey, Moss Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

3 Minutes Budget/Personnel Committee November 9, Paul Sciuto General Manager Rob Wellington Legal Counsel Mary Jo Walker Interim Chief Financial Officer Chayito Ibarra Executive Assistant/Board Clerk Tamsen McNarie Assistant General Manager Jennifer Gonzalez Engineering Manager Jerry Valladao Associate Engineer OTHERS PRESENT: Bryan Gruber, CPA Lance, Soll & Lunghard, LLP 3. PUBLIC COMMENTS None 4. BUDGET AMENDMENTS AND RESERVE UPDATE Ms. Walker provided the Committee with a list of the budget amendments that were approved during September and October. Effective September 25, 2017 the Agency s budget amendment policy allows staff to approve appropriation transfers between line items and projects below $75,000. With regard to Agency reserves, Ms. Walker stated that the preliminary combined reserve balance is expected to be within the new reserve policy levels of approximately $6.4 million, for the period ending October Information Only No Action Required. 5. RECEIVE FISCAL YEAR 2016/17 DRAFT FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT Ms. Walker presented this item and stated that the Agency s audit was performed by Lance, Soll & Lunghard (LSL), LLP. A draft copy of the Agency s financial statements were provided to the Committee for review. Ms. Walker introduced Bryan Gruber, CPA with Lance, Soll & Lunghard, LLP who provided the Committee with a summary of the audit process along with highlights from the audit. Mr. Gruber answered questions from the Committee and reported that the Agency received an unmodified or clean opinion. The final financial statements which include the Transmittal letter, management discussion, and analysis; and the statistical section will be available at the November Board meeting. ACTION TAKEN: It was moved by Member Moore, seconded by Member Grier, to Receive Fiscal Year 2016/17 Draft Financial Statements and Independent Auditors Report, and carried by the following vote Ayes: Allion, Grier, Moore, De La Rosa Noes: None 2

4 Minutes Budget/Personnel Committee November 9, Absent: None 6. CONSIDER RECOMMENDING APPROVAL OF A RESOLUTION AUTHORIZING TURNKEY CONTRACT FOR RETROFITTING OF TRICKLING FILTERS WITOUT FORMAL COMPETITIVE BIDDING AND RECOMMEND AWARD OF TURNKEY PROJECT CONTRACT TO MISCOWATER FOR CP303 TRICKLING FILTERS UPGRADE PROJECT, PHASE 1 Mr. Valladao introduced this item and stated that the main goal of this project was to improve the performance/treatment process of the trickling filter system to provide a consistent quality influent to the new Advanced Water Purification Facility. He stated that the project will result in higher treatment performance and will provide better control of the trickling filter system. Mr. Valladao provided the Committee with an overview of the reasons why purchasing trickling filter equipment to retrofit two trickling filters through a turnkey contract without competitive bidding and pursuant to a negotiated purchase was in the best interest of the Agency. ACTION TAKEN: It was moved by Member Grier, seconded by Member De La Rosa, to recommend approval of a Resolution Authorizing Turnkey Contract for Retrofitting of Trickling Filters without Formal Competitive Bidding and Recommend Award of Turnkey Project Contract to Miscowater for CP303 Trickling Filters Upgrade Project, Phase 1, and carried by the following vote Ayes: Allion, Grier, Moore, De La Rosa Noes: None Absent: None 7. CONSIDER RECOMMENDING AWARD OF CONTRACT TO ALL AMERICAN AVIAN ABATEMENT FOR SEAGULL ABATEMENT SERVICE Ms. McNarie introduced this item and stated that the Regional Treatment Plant is located within 100 yards of the Monterey Regional Waste Management District. The refuse in the landfill and the onsite operations associated with the Zero Waste Energy (ZWE) facility provide a food source for seagulls. To prevent seagulls from roosting on the Regional Treatment Plant grounds, All-American Avian Abatement utilizes birds of prey to deter the seagulls from landing on structures. Staff is requesting a contract with All-American Avian Abatement in the amount of $51,480. ACTION TAKEN: It was moved by Member Grier, seconded by Member Moore, to recommend Award of Contract to All American Avian Abatement for Seagull Abatement Service, in the amount of $51,480, and carried by the following vote: Ayes: Allion, Grier, Moore, De La Rosa Noes: None 3

5 Minutes Budget/Personnel Committee November 9, Absent: None 8. STAFF REPORTS (None) 9. COMMITTEE MEMBER COMMENTS/REPORTS (None) 10.ADJOURNMENT At 1:38 pm, with no further business, Chair Allion adjourned the Budget/Personnel Committee meeting to the next regularly scheduled Budget/Personnel Committee meeting on Friday, January 12, 2018 at 12:30 pm. 4

6 5 From: BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 INFORMATIONAL ITEM BUDGET AMENDMENTS AND RESERVE UPDATE Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BUDGET AMENDMENTS The Agency s Budget Amendment Policy allows staff to approve transfers between line items and projects when a transfer is below $75,000. The chart below represents budget amendments that were approved during the months of November and December, November and December Budget Adjustments Transfers Under $75,000 Transferred from Salary and Benefits to Membership Dues to fund the Salinas Valley Basin Groundwater Sustainability Agency. $20,000 Transferred from Community Relations Consulting Services to Building and Grounds Repair to replace carpeting in several offices. $10,000 Transferred from Regular Wages to Temporary Agency to fund temporary Customer Service Representatives during two staff members leaves of absence. $20,592 Transferred from Regular Wages to Management Services to fund interim Chief Financial Officer during staff turnover. $55,000 Transferred from Health Insurance to Reimbursed Auto Allowance to cover Asst General Manager annual vehicle allowance. $4,250 Transferred from RTP Polymers/Chemicals to Buildings and Grounds Repair to fund seagull abatement. $51,480 Transfered from Capital Improvement Projects to Support Services to fund SCADA software maintenance support. $5,015 Transferred from Community Outreach position to Community Relations to start the Company Store and other outreach activities, and replace carpet in the Administrative Conference Room $30,000 Transferred from Buildings and Grounds to Power Generation Repair within the Maintenance Department for switches needed to comply with safety requirements. $20,000

7 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 PAGE 2 OF 2 6 RESERVE UPDATE The combined reserve balance for the period ending December 2017 is expected to be within the new reserve policy levels of approximately $6.4 million. And Mid-Year Update will be presented to this Committee at the February meeting during which reserves will be further analyzed. FISCAL IMPACT This item is informational only. All administrative adjustments reflect transfers between budgeted line items in the approved FY Budget. Information only no action needed.

8 7 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 INFORMATIONAL ITEM UPDATE ON HISTORY OF AGENCY DEBT From: Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BACKGROUND The Budget/Personnel Committee asked staff to summarize the history of the Agency s debt since its inception. Attached is a one page summary of debt issued and loans received by the Agency that I was able to trace, beginning in I did this research primarily by using the annual audited financial statements. For the earlier years when the audited financial statements were not sufficiently detailed, I used the Electronic Municipal Market Access (EMMA) website where information is provided on all bond issuances throughout the country. Below is a summary of the Agency s debt history as of June 30, Total debt issued or loans received $165,566,711 Total amount refinanced (65,780,384) Net debt issued or loans received 99,786,327 Principal debt payments (61,211,149) Outstanding debt and loans as of June 30, 2017 $ 38,575,178 FISCAL IMPACT None. Information only no action needed. ATTACHMENT: 1. Summary of Agency s debt history as June 30, 2017

9 MONTEREY ONE WATER HISTORY OF DEBT - AS OF JUNE 30, 2017 Total Total Total Year Name of Original Refinance Debt Average Issued Bond/Loan Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond Rev Bond SRF Loan SRF Loan Bureau of Rec Line of Credit SRF Loan Issue Amt Amount Payments Interest Rate Purpose BONDS 1981 Original Issue Amount 18,000,000 18,000,000 Debt Payments (2,500,000) (2,500,000) Construct regional wastewater interceptors, pump stations, outfalls 1984 Original Issue Amount (15,500,000) 15,500,000 15,500,000 (15,500,000) 9.15% To refinance the 1981 bonds Debt Payments (5,150,000) (5,150,000) 1985 Original Issue Amount 7,000,000 7,000, % Stage III of the regional wastewater Debt Payments (1,400,000) (1,400,000) 1990 Original Issue Amount (10,350,000) (5,600,000) 16,980,000 16,980,000 (15,950,000) 6.65% To refinance the 1984 and 1985 bonds Debt Payments (5,079,616) (5,079,616) 1993 Original Issue Amount (4,645,000) 5,250,000 5,250,000 (4,645,000) 5.09% To partially refinance the 1990 bonds Debt Payments (845,000) (845,000) 1994 Original Issue Amount 10,603,049 10,603, % Debt Payments (3,578,049) (3,578,049) Various improves to existing plant, new admin facilities, demo old plant, etc Original Issue Amount (7,255,384) 7,255,384 7,255,384 (7,255,384) 4.66% To refinance the 1990 bonds Debt Payments (7,255,384) (7,255,384) 2003 Original Issue Amount (4,405,000) (7,025,000) 11,430,000 11,430,000 (11,430,000) 3.57% To refinance the 1993 and 1994 bonds Debt Payments (8,210,000) (8,210,000) 2006 Original Issue Amount 9,780,000 9,780, % Debt Payments (2,000,000) (2,000,000) Bio-solid watering facility, a new cogen facility, Salinas pump capacity enhance 2012 Original Issue Amount 8,855,000 8,855, % PERS side fund financing Debt Payments (1,990,000) (1,990,000) 2013 Original Issue Amount (3,220,000) (7,780,000) 12,241,619 12,241,619 (11,000,000) 2.14% To refinance the 2003 and 2006 bonds Debt Payments (3,903,985) (3,903,985) LOANS Original Issue Amount 3,275,425 3,275, % Marina Project Debt Payments (3,275,425) (3,275,425) 1999 Original Issue Amount 8,850,000 8,850, % Salinas Valley Reclamation Project Debt Payments (8,237,564) (8,237,564) 2003 Original Issue Amount 20,544,400 20,544,400 0% Salinas Valley Reclamation Project Debt Payments (7,786,126) (7,786,126) 2016 Line of Credit 2,000,000 2,000,000 > of Prime or Financing for Pure Water project Fed Fund+0.5% 2017 Original Issue Amount 8,001,834 8,001,834 1% Pure Water project (Part of $88 million) Balance at June 30, ,865,000 8,337, ,436 12,758,274 2,000,000 8,001, ,566,711 (65,780,384) (61,211,149) 38,575,178 99,786,327 38,575,178 NOTE: By 1977, MPWPCA secured state and federal grants for two projects: $4,000,000 for planning and engineering for Stages II and III of the regional plan, and $8,610,582 for planning, engineering and construction of Stage I (Pacific Grove-Monterey consolidation). The EPA paid 75% and SWRCB paid 12.5%. Stage I was completed in 1980, stage II was completed in the late 1980s, and Stage III completed in 1990.

10 9 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 INFORMATIONAL ITEM COST ALLOCATION PLAN OVERVIEW From: Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BACKGROUND The Budget /Personnel Committee asked staff to transmit the Agency s Cost Allocation Plan to them. Attached is a Power Point Presentation that was presented to the Board of Directors at the October 26, 2015, Board meeting. The chart on page 4 of the presentation is a helpful summary of the plan. Also attached is the Cost Allocation Plan Overview which provides more detail. FISCAL IMPACT None. Information only no action needed. ATTACHMENTS: 1. October 26, 2015 Cost Allocation Plan PowerPoint 2. Cost Allocation Plan overview

11 MRWPCA Cost Allocation Plan 10 October 26, 2015

12 Overview Introduction New agreement Address equity Transparency, easy to understand Brief overview of cost allocation plan 11 Receive report from Independent Consultant NBS Services

13 Cost Allocation Plan Indirect Cost Overview Allocates administrative cost centers to operational functions Establishes allocation factors based on proportional support Incorporates practices of activity based costing Benefits Provides an allocation method similar to a Federal Office of Management and Budget (OMB) Compliant Cost Allocation Plan Title 2, CFR, Part 200, Cost Principles for State Local, and Indian Tribal Governments, previously known as OMB Circulars A-21 New agreement contains clause to transition to an OMB Compliant Plan Provides a method that is easier to understand, more transparent Applies to operating costs, eliminates fluctuations for capital outlays 12

14 Cost Allocation Plan INDIRECT OR ADMINISTRATIVE COST CENTERS Admin. IT HR Finance RTP Admin Safety % of Budget % of Employees % of Employees % of Invoices, % of Employees % of Budget % of Employees % of Employees 13 Each Indirect Cost Center is allocated to Operational Cost Centers based on a relevant factor DIRECT OR OPERATIONAL COST CENTERS Board of Directors Customer Service RTP Ops. Env. Services Plant Maint. Field Maint. Utilities/ Cogen Engineering GWR CSIP SVRP SRDF Stormwater

15 Sample: Department Allocation Human Resources Allocation Factor: Adopted 77.5 FTE s (1) FY 15/16 Budget: $383,600 (1) FTE s Full Time Equivalent Positions MRWPCA CSIP SVRP SRDF FTE 2.76 FTE 3.04 FTE.13 FTE $354,200 $13,700 $15,000 $700 PCA Receives 92.3% of budget allocation WRA Receives 7.7% of budget allocation

16 Original Indirect (1) FY 15/16 Budget Demand: 22,750 AF New Method FY 15/16 Budget Demand: 22,750 AF WRA $3,802,000 $3,802,000 PCA O & M 3,485,000 3,423,000 Indirect 308, ,000 Capital 432, ,000 Loan 1,819,000 1,819,000 Subtotal PCA $6,044,000 $6,105,000 Total Costs $9,846,000 $9,907,000 Budgetary Cost per Acre Foot $433 $ Indirect costs as a percent of budget 3.1% WRA O & M Indirect Capital 4.4% WRA O & M Indirect Capital Loan Loan (1) Assumes 5% indirect costs on utilities and chemicals; and 10% on other budgeted costs

17 Original Indirect (1) FY 15/16 Budget Demand: 22,750 AF New Method FY 15/16 Budget Demand: 22,750 AF New Method (2) FY 15/16 Budget Demand: 22,750 AF Addition: Pure Water Monterey Operations WRA $3,802,000 $3,802,000 $3,802,000 PCA Sample: Addition of Pure Water Monterey O & M 3,485,000 3,423,000 3,423,000 Indirect 308, , ,000 Capital 432, , ,000 Loan 1,819,000 1,819,000 1,819,000 Subtotal PCA $6,044,000 $6,105,000 $6,070,000 Total Costs $9,846,000 $9,907,000 $9,872, Budgetary Cost per Acre Foot $433 $435 $434 (1) Assumes 5% indirect costs on utilities and chemicals; and 10% on other budgeted costs (2) Assumes GWR/Pure Water Monterey overall operating budget of $3.26 million (labor, O & M, operating lease)

18 17 COST ALLOCATION PLAN OVERVIEW

19 18 MRWPCA COST ALLOCATION PLAN TABLE OF CONTENTS Section 1. Purpose... 1 Section 2. Support Service Department Narratives... 3 Section 3. Navigating the Cost Plan... 8 Exhibits A. Cost Allocation Plan Detail... Exhibit A

20 19 PURPOSE A Cost Allocation Plan is an analytical tool through which administrative or indirect services costs are apportioned to individual departments or cost centers within an organization. Allocated costs are typically termed agency-wide overhead. Most overhead/indirect service costs are those expenditures that provide support services or oversight to each department, and typically include legislative, managerial, financial, administrative, legal, personnel, technology, building and equipment use, and risk management activities. Allocated costs may also include services within non-administrative/support services departments that provide targeted benefits to specific departments. A general example of this would be specific skill sets from one department that actually exist to provide support to a department outside its own. A brief analysis of Monterey Regional Water Pollution Control s Agency s (MRWPCA) process for allocation costs are provided below: 1. Each department within MRWPCA s budget represents a unique function. Each department can be classified as either an administrative or operational unit. Administrative departments include Administration, Finance, Human Resources, Information Technology, Regional Treatment Plant Administration, and Safety. These departments provide support for the operational units. Costs associated with administrative departments are allocated to departments as either overhead or indirect services. 2. A review of line-item expenditures are conducted within each department to determine whether there are any significant costs which should be excluded or included as overhead. Examples of exclusions include one-time expenditures for capital outlay, transfers between funds, and debt service. The remaining allocable expenditures are considered costs for distribution to the operational departments. 3. MRWPCA assigns an allocation factor as the basis for distributing overhead/indirect service costs to departments or cost centers receiving support. Allocation factors include employee count, percentage of operating budget, and number of invoices. The factors represent approximately how much time each administrative position/department spends time supporting operational departments or programs. Ultimately, the allocation factor represents the actual or estimated workload of the allocated function and a reasonable method of apportioning benefit for the services received. 4. MRWPCA estimates the cost allocations at the beginning of the budget year based on the number of employees, percentage of budget, and the three year average number of invoices associated with each operational unit. Each administrative cost center is distributed across departments using the selected allocation factor for each cost center. This results in a total share of overhead/indirect service costs for each operational department / cost center. All costs applied throughout the year are based on actual operational department expenses incurred. 5. MRWPCA has established the Cost Allocation Plan included in this exhibit for the purpose of allocating overhead to shared and contracted services; and partner agencies. This cost allocation plan was not established to be consistent with Title 2, Code of Federal Regulations, Part 225, Cost Principles for State, Local, and Indian Tribal Governments (formerly known as

21 20 OMB A-87). The primary goal of the Title 2 Plan is typically to obtain reimbursement of overhead costs associated with State and Federal grants. The MRWPCA Cost Allocation Plan has been reviewed by an independent consultant, NBS, and has been determined to be reasonable for this specified use. The MRWPCA Cost Allocation Plan may be replaced at any time with a Plan that is compliant with Title 2, CFR, Part 225 for the purpose of obtaining reimbursement of overhead costs associated with State and Federal Grants. Data Sources MRWPCA referenced the following data to support the development of the initial Cost Allocation Plan: Budgeted expenditures for Fiscal Year 2015/16 Listing of all Agency positions by Department Number of invoices and purchase orders processed by each fund and department for Fiscal Years: 2012/13, 2013/14, and 2014/15 SUPPORT SERVICE DEPARTMENT NARRATIVES The full cost allocation plan allocates six administrative support departments to various operational department cost centers, based on a variety of factors. The plan identifies total allocable costs at approximately $3.37 million from the following administrative units for distribution to the operating functions: Budget Account Allocable Department Budget Total Allocable Expense Administration $1,106, Finance 916, Human Resources 383, Information Technology 242, RTP Administration 415, Safety 305,165 Total Administrative Allocations $3,370,283 The following paragraphs provide a brief description of each Administrative service department, along with a general explanation of how administrative costs are allocated to each functional department within the Plan. Administration (01-010) The Administration Department is responsible for all aspects of administration, operation, and planning activities of the Agency staff. The General Manager and the Executive Assistant/Clerk to the Board s salaries are included in this budget. The Administration Department is responsible for assisting the Board with policy development, implementation of strategic goals, and providing Agency leadership and management. Costs include legal counsel, insurance, contract services, and utility costs for the Harris Court administrative offices. While the Stormwater Program Manager s salaries are included in the FY 15/16 personnel expenses, they are directly charged to contracting entities and removed from the cost allocation. Insurance costs paid directly to the Monterey County Water Resources Agency for liability coverage associated with the Salinas

22 21 Valley Reclamation Project, Castroville Seaside Intrusion Project, and the Salinas River Diversion Facility operations have also been excluded from the allocation. The Administration Department budget, net of excludable line items, is charged to operational departments based on their percentage of the operational budgets. Finance (01-013) The Finance Department provides Agency-wide fiscal support including preparation of the Comprehensive Annual Financial Report, monthly financial reports; and the development and monitoring of the Agency s budget. The professional level Finance staff provide fiscal analyses and guidance to the General Manager, Board of Directors, partner agencies, and departments. Finance support staff provide accounts payable, payroll processing, procurement, project accounting, general ledger maintenance, and banking services. Costs associated with Finance staff are allocated based on the following factors: Chief Financial Officer and Accountant s salaries; along with a proportional share of the Finance Department expenses are allocated based on the operational units percentage of the budget Accounting Technician, Procurement Specialist, and Administrative Support Specialist salaries; along with a proportional share of Finance Department expenses are allocated based on a three-year average of invoices processed by the operational units Accounting Specialist Payroll, along with a proportional share of Finance Department expenses are allocated based on the percentage of full-time equivalent positions in each operating department Human Resources (01-011) The Human Resources Department supports the Agency by providing a wide range of personnel services such as benefits administration (health, dental, vision, employee assistance program), workers compensation, coordinating recruitment and selection; classification and compensation programs, as well as the administration of the Agency s personnel files, training records, medical files, and employee evaluations. The Department also provider employer/employee relations administrative services and contract negotiations, which includes employee and supervisory counseling on personnel policies, procedures, and practices; and providing assistance in handling of employee grievances. Costs associated with the Human Resources Department are allocated based on the percentage of full-time equivalent positions in each operating department Information Systems ( ) The Information Systems Department is responsible for developing, maintaining, and facilitating the implementation of a sound and integrated IT architecture. This includes the installation, integration, evaluation, and maintenance of the Agency s local and wide area networks, telephone, and audio video systems; while serving as a technical resource to staff on technology

23 22 needs. The Information Systems Department defines, delivers, and supports strategic plans for implementing information technologies. The costs of the Information Systems budget are allocated based on the percentage of full-time equivalent positions in each operating department RTP Administration (01-030) The RTP Administration Department is a centralized support service team located at the Regional Treatment Plant Facility. The Assistant General Manager provides leadership to all departments located at the Regional Treatment Plant and works closely with the General Manager to accompany Agency goals. Costs included within this budget unit primarily consist of salary and benefits associated with the Assistant General Manager, Administrative Support Specialist, and office expenses. All costs associated with the RTP Administration are allocated based on the following: General Manager salary and proportional share of expenses based on the operational department s percentage of the budget Administrative Support Specialist salary and proportional share of expenses based on the average percentage of budget and full-time equivalency positions within each operational department. Safety (01-016) The Safety Department provides service to all Agency employees though training and assistance in implementing safe work practices. The Safety Officer works to implement programs which meet and exceed Federal, State, and Regional requirements for work safety, contractor safety; and materials safety at all Agency facilities. The Safety Budget includes costs associated with Agency-wide safety training, protective equipment, and the safety shoe reimbursement program. Costs associated with the Safety Department are allocated based on the percentage of full-time equivalent positions in each operating department Additional Notes Administrative costs that are charged directly to specific functional areas or capital projects are not allocated as part of this cost allocation plan. NAVIGATING THE COST ALLOCATION PLAN An overview of the MRWPCA Cost Allocation Plan is listed below and attached to this report. Agency-Wide Chart Illustrates the departments identified as administrative cost centers and departments identified as operational cost centers. The allocation percentage of each administrative cost center is listed below each administrative cost function.

24 23 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 INFORMATIONAL ITEM UPDATE ON PREPARATION OF FISCAL YEAR BUDGET From: Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BACKGROUND The budget preparation cycle is well underway for the fiscal year budget. Below are a few key dates: DESCRIPTION OF ACTION BOARD/BPC DATE Mid-year status update for current year, reserves, CIP BPC February 9 Mid-year status update for current year, reserves, CIP Board February 26 General budget discussion, parameters, reserves, CIP BPC March 9 General budget discussion, parameters, reserves, CIP Board March 26 Draft budget information BPC April 13 Draft budget information Board April 30 Preliminary budget information BPC May 11 Preliminary budget information Board May 24 Budget workshop Board June 4 Review comments from budget workshop BPC June 8 Board adopts FY budget and related actions Board June 25 FY final budget document distributed Board July 30 FY will be the second year of the three-year rate increase. Staff will determine the appropriate increase needed to fund next year s operating and capital costs, up to the maximum of 10% which was approved in FY through the Proposition 218 process. FISCAL IMPACT None. Information only no action needed.

25 24 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 ACTION ITEM CONSIDER RECOMMENDING APPROVAL OF A RESOLUTION NOTIFYING THE LOCAL AGENCY INVESTMENT FUND (LAIF) OF OUR NAME CHANGE, AND IDENTIFYING THE AGENCY POSITIONS THAT ARE AUTHORIZED TO ORDER THE DEPOSIT OR WITHDRAWAL OF MONIES IN LAIF From: Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BACKGROUND Monterey One Water has funds invested in the California State Treasurer s Local Agency Investment Fund (LAIF). The amount invested has ranged between $4.4 million and $12.9 million during the past year. LAIF requires a Board resolution notifying them of our name change to Monterey One Water. It would also be an opportune time to identify the positions which are authorized to deposit or withdraw monies from LAIF since the Chief Financial Officer and Assistant General Manager are new. This item will go to the Monterey One Water Board of Directors on January 29, FISCAL IMPACT Within a few months, we will no longer be able to transfer funds out of LAIF into our bank checking account. Until LAIF is notified of the Agency s name change, it will continue using MRWPCA when making transfers from LAIF into our bank checking account, but our bank will only accept transfers in the name of MRWPCA for six months after our official name change. RECOMMENDATION: That the Budget and Personnel Committee recommend that the Board of Directors approve a resolution authorizing the deposit and withdrawal of Monterey One Water monies in the Local Agency Investment Fund in the State Treasurer in accordance with Government Code section et. seq. for the purpose of investment as provided therein. Attachments: 1. M1W Resolution No XX, notifying LAIF of Agency name change and identifying positions authorized to deposit or withdraw monies from LAIF 2. MRWPCA Resolution No , identifying positions authorized to deposit or withdraw monies from LAIF Joint Powers Authority Member Entities: Boronda County Sanitation District, Castroville Community Services District, County of Monterey, Del Rey Oaks, Fort Ord, Marina Coast Water District, Monterey, Moss Landing County Sanitation District, Pacific Grove, Salinas, Sand City, and Seaside.

26 25 RESOLUTION NO. XXXX-XX A RESOLUTION OF MONTEREY ONE WATER NOTIFYING THE LOCAL AGENCY INVESTMENT FUND (LAIF) OF ITS NAME CHANGE, AND IDENTIFYING THE AGENCY POSITIONS THAT ARE AUTHORIZED TO ORDER THE DEPOSIT OR WITHDRAWAL OF MONIES IN LAIF, AND REPEALING RESOLUTION NO REGARDING THE SAME MATTER BE IT RESOLVED by the Board of Directors of Monterey One Water, as follows: Resolution No Repealed. The Agency s prior Resolution , relating to the Monterey Regional Water Pollution Control Agency identifying the Agency positions that are authorized to order the deposit or withdrawal of monies in the Local Agency Investment Fund (LAIF) is hereby repealed in its entirety and replaced with this Resolution. WHEREAS, the Local Agency Investment Fund is established in the State Treasury under Government Code section et. seq. for the deposit of money of a local agency for purposes of investment by the State Treasurer; and WHEREAS, the Board of Directors hereby finds that the deposit and withdrawal of money in the Local Agency Investment Fund in accordance with Government Code section et. seq. for the purpose of investment as provided therein is in the best interests of Monterey One Water; WHEREAS, the Board of Directors of the Monterey Regional Water Pollution Control Agency officially changed its name to Monterey One Water, with the passage of Resolution on October 30, NOW THEREFORE, BE IT RESOLVED that the Board of Directors hereby authorizes the deposit and withdrawal of Monterey One Water monies in the Local Agency Investment Fund in the State Treasury in accordance with Government Code section et. seq. for the purpose of investment as provided therein. BE IT FURTHER RESOLVED, as follows: Section 1. The following Monterey One Water officers holding the title(s) specified herein below or their successors in office are each hereby authorized to order the deposit or withdrawal of monies in the Local Agency Investment Fund and may execute and deliver any and all documents necessary or advisable in order to effectuate the purposes of this resolution and the transactions contemplated hereby: Paul A. Sciuto, General Manager NAME, Chief Financial Officer (Signature) (Signature)

27 26 Tamsen McNarie, Assistant General Manager (Signature) Section 2. This Resolution shall remain in full force and effect until rescinded by the Board of Directors by resolution and a copy of the Resolution rescinding this Resolution is filed with the State Treasurer s Office. PASSED AND ADOPTED by the Board of Directors of Monterey One Water at the regular meeting duly held on January 29, 2018, by the following vote: AYES: NOES: ABSENT: ATTEST: Rudy Fischer, Chair Monterey One Water Board of Directors Paul A. Sciuto, General Manager Secretary to the Board

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30 29 BUDGET/PERSONNEL COMMITTEE JANUARY 11, 2018 ACTION ITEM CONSIDER RECOMMENDING RATIFICATION OF BUDGET ADJUSTMENT FOR $4,112,541 TO SUPPORT PAYMENT OF 50% OF REIMBURSEMENTS FROM THE STATE REVOLVING FUND LOAN TO MPWMD From: Mary Jo Walker, Interim Chief Financial Officer Approval: GM Legal CFO BACKGROUND On October 30, 2017, the M1W Board of Directors approved Amendment 2 to the Cost Sharing Agreement with Monterey Peninsula Water Management District (MPWMD) for the Pure Water Monterey Project. The amended Agreement specified in section 1(c) that the initial reimbursement of approximately $8.2 million, which was received by September 2017, will be divided equally between M1W and the MPWMD. The amount had been set aside in the FY Budget as Restricted Fund Balance. However, the payment to MPWMD was not appropriated since negotiations were still under way when the FY Budget was adopted. It was clear that the Board s intentions on October 30 were to remit $4.1 million to MPWMD, so staff prepared a Budget Adjustment form. Due to the large dollar amount, it is recommended that the Board of Directors ratify the Budget Adjustment form so our documentation is complete. This item will go to the M1W Board of Directors on January 29, FISCAL IMPACT $8.2 million had been set aside in the FY Budget as Restricted Fund Balance. Payment of $4.1 million to MPWMD will reduce Restricted Fund Balance by that amount, but will not affect our Operating, Contingency, or Equipment / Capital Project Reserves, which remain at about $6.4 million, in compliance with our Reserve Policy. RECOMMENDATION: That the Budget and Personnel Committee recommend that the Board of Directors ratify the Budget Adjustment form for $4,112,541 to support payment of 50% of prior reimbursements from the State Revolving Fund Loan to MPWMD. Attachment: 1. Budget Adjustment Form

31 30 M1W Budget Adjustment Form Date Requesting Department Finance Department Administrative Board X Item # Board Date Board Approval Revenues Account # Account Description Increase/Decrease Total - Expenditures Account # Account Description Increase/Decrease GWR ALLOCATION EXPENSE 4,112,541 Total 4,112,541 Net Impact (4,112,541) Purpose: To reimburse MPWMD 50% of $8,225,082 receipts from the State Revolving Fund Loan. Department Head Approval Asst. General Manager Approval Finance Department Approval General Manager Approval