Finance Committee Meeting Minutes Tuesday, February 12, 2019

For your consideration, please read the minutes from the Finance Committee Meeting held on Tuesday, February 12, 2019 at 10:00 a.m.

Finance Committee Minutes 2-12-19 with Attachments

To read the minutes, please open or download the pdf from the link above, or you may see more below.

Brunswick-Glynn County Joint Water & Sewer Commission

1703 Gloucester Street, Brunswick, GA 31520

Commission Meeting Room

Tuesday, February 12, 2019 at 10:00 AM

 FINANCE COMMITTEE MINUTES

PRESENT:                             

Steve Copeland, Committee Chairman

Donald Elliott, Commissioner

Tripp Stephens, Commissioner

Jimmy Junkin, Executive Director

John Donaghy, Chief Financial Officer

ALSO PRESENT:                 

John Donaghy, Chief Financial Officer

LaDonnah Roberts, Senior Financial Analyst

 Janice Meridith, Executive Commission Admin.

MEDIA PRESENT:               

Taylor Cooper, The Brunswick News                                                                                                                                

Chairman Copeland called the meeting to order at 10:00 AM.

 PUBLIC COMMENT PERIOD

There being no citizens that wished to address the Committee, Chairman Copeland closed the Public Comment Period.

Commissioner Elliott made a motion seconded by Commissioner Stephens to add Tap Fees as Discussion Item #10 on the agenda.  Motion carried 3-0-0. 

DISCUSSION:

1. KPI Scorecard

Mr. Junkin advised that with the Strategic Business Plan there were 20 initiatives which staff worked through to identify specifics to measure the impact of those initiatives. The original list of specifics or Key Performance Indicators (KPIs) is a 13 page long list and includes all of the various organizational wide KPIs identified by staff.  Mr. Junkin noted that he plans to edit by each user and place the specific KPIs identified as pertinent to each user on a dashboard.  Mr. Junkin will send a digital copy of the original list of KPIs to Chairman Copeland, Commissioner Stephens and Commissioner Elliott.  Chairman Copeland mentioned that the Commissioners will need to see a higher level of KPIs that what staff would.  Mr. Junkin will set up a dashboard with the KPIs as selected by the Commissioners for their use.  Chairman Copeland noted that first the idea of KPIs is to have a way to report what is happening, and then after identifying the KPIs by importance and by what typical KPIs would be in the marketplace, they could then be used to manage the business.  Mr. Junkin provided that AWWA and WEF have done work on identifying the Attributes of Effective Utility Management, and KPIs used by some of the largest utilities were included and are useful examples of KPIs and industry provided norms.  Mr. Junkin will also provide this information digitally, as well as a sample scorecard for the Committee.

2. Line Item for Disaster Preparedness

Mr. Junkin noted that he and staff have discussed disaster preparedness and due to the last couple of hurricanes most of the standby supplies (cots, flashlights, etc.) that would be needed for another disaster have been cumulated, and the larger items such as generators are being worked on through FEMA grants.  Mr. Junkin mentioned that there is contingency in the budget for a future disaster occurrence and a separate line item may not need to be set-up for this purpose.  Chairman Copeland provided that he was interested in discussing the reimbursed $465K of funds that came from FEMA from the hurricane 2 years ago.  Since those monies were spent 2 years ago and disaster was not a line item budgeted for, Chairman Copeland was curious about where did the FEMA money received for that reimbursement end up at.  His concern is to ensure that these funds are not lost in the budget and spent without the Commission’s approval.  John Donaghy provided that for financial reporting, those funds were coded to a revenue account as cash coming in (“Other Income”), which is included as a part of the excess of revenues over expenditures. It was noted that this does skew budgetary goals and profit goals.  Mr. Donaghy suggested setting up a separate division code for these disaster funds to keep them separated from the other operating expenditures.  When asked what GL account these funds went into, Mr. Donaghy advised they were included in the damage reimbursement line item.  The commissioners suggested if these funds can be set up in an account of a disaster reserve, however this still ends up overstating expenses for a given fiscal year with the reimbursement following in a later year.  Mr. Junkin suggested that with the portion of the Operating Reserve being held for emergency purposes this is where the funding for disaster related expenses would come from, and the reimbursement funding received from FEMA could then go back into these reserves.  Mr. Donaghy will draft procedures to fund disaster expenses for the Finance Committee to review, to include the initial funding of major purchases for the disaster or emergency needs, how the damaged equipment will be repaired, and how to account for the monies reimbursed by FEMA.  After further discussion, it was determined that Mr. Donaghy would also draft a procedure for funding all of the various reserves to include the definition or purpose of each reserves, the requirements for funding each reserve, and the fiscal year end disposition for excess or deficit.

Commissioner Stephens left the meeting at 10:22 a.m.

3. Unbudgeted Equipment Purchase

Mr. Junkin advised that in the past months three of the vehicles used by the meter readers have been totaled in accidents not at the fault of JWSC staff.  The meter readers have been borrowing vehicles from other divisions when possible, but this causes inconveniences for those divisions as well.   Mr. Junkin noted that one of the vehicles being borrowed is now in need of a new transmission.  Replacement vehicles for the three that were totaled are needed as soon as possible in order for the meter readers to have the necessary transportation to do their job, as there are five full time meter readers.  There was discussion pertaining to the use of Capital Reserve funds or Operating Reserve funds for the purchase.  Chairman Copeland requested the details of the three vehicles to be replaced including the quoted costs of replacements, payments received from insurance, and justification for the purchase to be provided to the Committee to make a recommendation for approval at the next commission meeting.

4. Cost Savings Realized & Anticipated

Mr. Junkin provided an update on items or changes made or anticipated where JWSC will see an ongoing result of savings.

Savings/Changes Already Made

• Staggered shifts in SP&M collections and lift station crews
• Revised SCADA programming
• Weekly maintenance scheduling and planning

Anticipated Savings/Changes

• Purchase of JWSC trucks/equipment for hauling sludge to landfill
• Sludge consolidation between plants, rebuilding dryer for higher efficiencies, drying sludge more to reduce disposal costs
• Process control of oxygen into aeration basins at Academy Creek
• Revenue recovery with large meter testing
• Energy audit (SCADA, pump motor efficiencies, Ga. Power billing consolidation and rate plan with peaking component as suggested by Chairman Copeland, etc.)

5. Performance of Investments

John Donaghy reviewed the investment Account Report with the committee.  The report contained an investment account summary and activity summary for each of the following investment accounts:  Operating Reserve Investments, Repair and Replacement Reserve Investments, Capital Reserve Investments, Customer Deposit Reserve Investments, and Capital improvement Fee Reserve Investments.  Chairman Copeland advised that what he was looking for in this discussion item was a total amount showing how much money was invested and what the return was on that.  Mr. Donaghy noted that this information was contained in the report for each of the five investment accounts and reviewed those details.  Commissioner Elliott suggested that a summary be prepared cumulating the numbers for all the reserves together.  Chairman Copeland described his concept form of the report as his envisioned it and the intended use of the information on the investment accounts.  He would like for this to be a monthly report providing the status of the investments and returns.  There was some additional discussion on investments, interest rates, yields, etc.

6. Performance Report for the Commission

Mr. Junkin advised that every 5 years JWSC is required within the enabling legislation to do a performance audit.  Carl Vinson Institute did the 2014 performance audit for JWSC.  Mr. Junkin noted that audit was geared toward the number of personnel involved in performing certain tasks, and is not the same as a financial audit. For this audit, he suggested it might be more beneficial and useful to look at the performance of the overall entity both in operations and in finances, look at trends, etc.  Mr. Junkin has recently discussed this with Raftelis who provided information on audits and analysis.  Mr. Junkin noted he would like for the Commissioners to advise as to what they believe is most important in measuring the performance of JWSC as an entity, and to provide any additional thoughts they may have.  Mr. Junkin will gather and forward information to the Commissioners for their review and consideration in meeting the requirement of the performance audit.

The discussion turned towards financial reporting.  Chairman Copeland suggested that the full detailed financial statement be provided to the Finance Committee to vet all of the information before going to full Commission, and that the more condensed form of the report may be all that the full Commission requires.  Divisional summaries providing a total amount for each divisional code were discussed, as well as reporting totals for non-divisional line codes (i.e. office supplies, technical services, general supplies, etc.)  The committee discussed the details of the financial statements as provided.  John Donaghy displayed and explained the various OpenGov reports that have been created and discussed options for financial information that the Commissioners may want to review.  The Commissioners will have access to this fully detailed system for reviewing specific financial reports and information at their convenience.  The condensed financial statement as to be provided to the full Commission was discussed in more detail as to what information is necessary for their review.  Cityworks software system and the options for reporting and other organizational needs were then discussed in terms of asset management, operations and maintenance.  

7. Fiscal Year 2020 Budget Preparation Status

Mr. Junkin advised that senior staff have been reviewing divisional budget drafts for the Finance Committee and full Commission to examine.  Senior staff will be continuing meetings during the next week on budgeting.  Mr. Junkin indicated that there were a couple of open positions that have remained open for a long period of time and could be reallocated for funding possible open positions for an Asset Management Manager and possibly a Maintenance Manager.  The purposes of these positions were further discussed.  Mr. Junkin will work on drafting job descriptions for these 2 possible positions.

8. Financial Reports

The discussion on financial reports was covered within the discussion item #6.

9. Finance Committee Calendar

The discussion on the finance committee calendar was deferred until the full Commission calendar is set and approved.  Scheduling the Finance Committee meetings based on the timing of financial reporting as compared with full Commission meetings was briefly addressed.

10. Tap Fees

It was determined that this item did not need further discussion at this time.

There being no further business, Chairman Copeland adjourned the meeting at 1:43 p.m.