NOTICE OF A REGULAR MEETING OF THE OLIVENHAIN MUNICIPAL WATER

DISTRICT’S FINANCE COMMITTEE 1966 Olivenhain Road, Encinitas, CA 92024 Tel: (760) 753-6466 • Fax: (760) 753-1578

Pursuant to AB 3035, effective January 1, 2003, any person who requires a

disability related modification or accommodation in order to participate in a

public meeting shall make such a request in writing to the District for

immediate consideration.

DATE: WEDNESDAY, JANUARY 30, 2019

TIME: 9:00 A.M.

PLACE: DISTRICT OFFICE

Note: Items On The Agenda May Be Taken Out Of Sequential Order As Their Priority Is Determined By The Committee

1. CALL TO ORDER

2. ROLL CALL (BOARD MEMBERS)

3. ADOPTION OF THE AGENDA

4. PUBLIC COMMENTS

5. CONSIDER APPROVAL OF THE MINUTES OF JANUARY 10, 2019 SPECIAL

FINANCE COMMITTEE MEETING 6. REVIEW OF QUARTERLY INVESTMENTS AND CASH POSITION REPORTS (Q4

2018) 7. REVIEW OF STAFF-PROPOSED ADJUSTMENTS TO FISCAL YEAR 2018/19

OPERATING AND CAPITAL BUDGET 8. CONSIDER FUTURE AGENDA ITEMS

9. ADJOURNMENT

MINUTES OF A SPECIAL MEETING OF THE FINANCE COMMITTEE

OF OLIVENHAIN MUNICIPAL WATER DISTRICT

January 10, 2019

A special meeting of the Finance Committee of Olivenhain Municipal Water District was held on Thursday, January 10, 2019, at the District office, 1966 Olivenhain Road, Encinitas, California.

The meeting was called to order at 10:02 a.m. In attendance were Edmund K. Sprague, Board President and Division 5 Director; Lawrence A. Watt, Treasurer and Division 2 Director; Rainy Selamat, Finance Manager; Kimberly Thorner, General Manager; and Leo Mendez, Accounting Supervisor.

1. CALL TO ORDER 2. ROLL CALL (BOARD MEMBERS) 3. ADOPTION OF THE AGENDA

Director Watt moved to adopt the agenda, seconded by Director Sprague and carried

unanimously. 4. PUBLIC COMMENTS There were no public comments. 5. CONSIDER APPROVAL OF THE MINUTES OF THE NOVEMBER 14, 2018 REGULAR

FINANCE COMMITTEE MEETING

Director Watt moved to approve the November 14, 2018 meeting minutes, seconded by Director Sprague and carried unanimously.

6. REVIEW AND DISCUSS STAFF PROPOSED 2019 POTABLE AND RECYCLED WATER RATES AND CHARGES Finance Manager Selamat presented Staff-proposed 2019 rate increases for potable and recycled water rates and OMWD Fire Meter Charges. An overview of the proposed 2.9% increase to potable and recycled water rates and a 3% increase to OMWD Fire Meter charges including the reasons for the rate increases, projected revenues and expenses, average monthly bills in comparison to other agencies, information on the District’s

Proposition 218 Notice, and information on current vs. proposed rates were also reviewed with the Commitee. Finance Manager Selamat added that Staff recommended 2.9% increase is on the commodity rate only and that fixed charges are unaffected because the San Diego County Water Authority, the District’s water wholesaler, did not increase its fixed charges to OMWD. Finance Manager Selamat mentioned to the Committee that although the commodity rate increase is 2.9%, the impact to residential customers would be 1.9% because staff is not proposing an increase to water fixed charges in 2019. Director Sprague made a recommendation to add this information for presentation to the Board. The Finance Committee agreed with the 2019 water rates and charges as proposed by Staff.

7. CONSIDER FUTURE AGENDA ITEMS

General Manager Thorner introduced Staff’s proposal to change the District’s budget cycle from an annual budget to a two-year budget and asked the committee for its consideration. General Manager Thorner added that many other agencies use a two-year budget. The Committee continued with the discussion. Following the discussion, Director Watt made a recommendation to add the item to the agenda of a future board meeting, where the pros and cons will be reviewed and discussed for consideration by the Board. General Manager Thorner agreed to include this discussion as an agenda item for the February 13, 2019 board meeting.

8. ADJOURNMENT The meeting was adjourned at 10:54 a.m.

Memo Date: January 30, 2019

To: Finance Committee

From: Rainy Selamat, Finance Manager

Via: Kimberly Thorner, General Manager

Subject: QUARTERLY INVESTMENT AND CASH POSITION REPORTS (INFORMATION ONLY)

Purpose

The purpose of this agenda is to provide fourth quarter (Q4) 2018 investment and cash information to the Finance Committee per the District’s Investment Policy.

Recommendation It is recommended that the Committee review and receive the attached report as presented.

Agenda Item 6

Background The attached reports are presented to provide information to the Finance Committee as required by the District’s Annual Investment Policy, which was adopted by the Board at the December 2018 board meeting. The purpose of the District’s Investment Policy is to identify policies and procedures that shall govern the investment of all District funds. The ultimate goal of the policy is to enhance the economic position of the District while protecting its funds. These policies have been followed in making all investment decisions on behalf of the District. The Annual Investment Policy also states that at least once each quarter, the District’s Finance Manager shall provide an oral report on the District’s investments and cash position to the Finance Committee for review and discussion.

Discussion As of December 31, 2018, all investments are in compliance with the Board’s Investment Policy. Staff will be available during the meeting to answer any questions that the Committee may have on the attached report. Attachment: Monthly Cash and Investment Summary as of December 31, 2018 (Draft)

Memo Date: January 30, 2019

To: Finance Committee

From: Rainy Selamat, Finance Manager

Via: Kimberly Thorner, General Manager

Subject: REVIEW OF STAFF PROPOSED ADJUSTMENTS TO FISCAL YEAR 2018/19 OPERATING AND CAPITAL BUDGET

Staff has prepared the attached presentation for discussion with the Committee during the meeting. If approved by the Committee at the meeting, proposed budget adjustments will be presented to the Board at its February 13, 2019 meeting for review and consideration.

Agenda Item 7

Mid-Year Budget ReviewOperating and Capital Budget FY 18-19

OMWD Finance Committee MeetingJanuary 30, 2019

DRAFT

Condensed Operating BudgetFiscal Year 2018/19

1* Principal and Interest payments for all outstanding debt.Capital contribution revenues are considered to be a non-operating measurement tool. Therefore, it is excluded for mid-year budget purposes.

Comparative Detailed Schedule of Actual Operating Expenses vs Budget

Fiscal Year 2018/19

2

Comparative Detailed Schedule of Actual Operating Expenses vs Budget

Fiscal Year 2018/19 – cont.

3

4

Capital Budget – Highlights –• Small Equipment Purchases

– A proposed increase in Small Capital Item Purchases of $51,700 • DCMTWP Equipment Purchases ( Turbidity and CL2 Analyzer) - $23,000• IT Equipment (Macbooks and Ipads) - $14,000• Records Scanner - $7,000 • OMWD Facility’s Fence and Gate - $9,000

• Capital Improvement Program (Betterment and Replacement Projects)– A net $3,937,000 decrease in the water, sewer, and recycled overall

appropriations for fiscal year 2018-19• Timing of expenditures on several large CIP Projects (slide 5)• Proposed new projects to be added and completed in 2019 (slide 5)• Projects completed in fiscal year 2018/19 - under budget

5

Summary of Small Capital Item PurchasesAs of December 31, 2018

6

Summary of Small Capital Item PurchasesAs of December 31, 2018 – cont.

7

Capital Improvement Project (CIP) Budget Review SummaryAs of December 31, 2018

8

Capital Improvement Project (CIP) Budget Review Summary by Funding Source

As of December 31, 2018

9

Questions?

10

Action Item

• If approved by the Committee, fiscal year 2018/19 budget adjustments will be presented to the Board for consideration and approval at the February 13 meeting.