November 22, 2004
The Board of Directors of the San Benito County Water
District convened in special session at
a. Pledge of
Allegiance to the Flag.
President Perry
called the meeting to order at
AGENDA ITEMS
1. Financial Statements and Annual Audit FY 2003-2004
a. Presentation and Acceptance of the Report
of Certified Public Accountant and Financial Statements with Supplementary
Information for Fiscal Year ended
Patricia
Kaufman of Kaufman and Associates noted to the board that she had met with the
Audit and Budget Committee and due to some discussion; minor changes were made
to the report. Ms. Kaufman noted that it
was a clean, unqualified opinion, which presents a fair representation of the
District’s financial condition. Ms.
Kaufman reviewed the report and noted that management had prepared the
introduction section and that this section is not audited. Ms. Kaufman noted
that after testing they are able to provide a basis for their opinion. Paragraph 4 is a required part to the
financial statement and noted that the PERS pension schedule is not
audited. Ms. Kaufman noted that the
working capital has improved and it has freed up that restricted cash. She also noted that management has chosen to
add the cash and investment section, Ms. Kaufman noted
that this was not required till June 2005. Ms, Kaufman noted that there is no
management letter included this year, that the internal controls are working
well and that no recommendations were made for improvement.
Director
De La Cruz asked what the levels of opinion were. Ms. Kaufman noted that there are three levels
of opinions, an unqualified opinion noting that everything is fine, a qualified
opinion, wherein everything is fine, with the exception of one item and an
adverse opinion, which are very rare and most auditors would withdraw from the
engagement.
Director
De Le Cruz noted that on page 27 the PERS scheduled funding for fiscal year
02/03 it showed that we were under funded at 91.9% and asked Mr. Gregg what
measures were being taken to meet that goal.
District
Manager/Engineer John S. Gregg noted that was a matter in which the District
has no control. We are seeing the impact
of the adverse investments of the early 2000’s.
We have gone from a super funded investment fund to an under funded
pension plan. The District is on a
schedule established by PERS in which the contributions are increasing to
stabilize our funded or un-funded liability.
They have a formula, which allows you to be under funded for a period of
time as the market adjusts.
Director Keck asked if the
entire system was under funded or if this was just the District.
District Manager/Engineer
John S. Gregg noted that he could not answer that question. He did note that most agencies were under
funded.
District Manager/Engineer John
S. Gregg noted to the board that if they found the financial report in order it
would be in appropriate to accept it.
Upon a motion duly made and seconded, the financial report was
unanimously accepted.
Director De La Cruz noted that this
was one of the finest financial document he had seen.
District
Manager/Engineer John S. Gregg noted that the District is engaged in and is likely
to participate in initiatives with respect to addressing water supply issues,
community wastewater and urban water quality it is likely that the District
will be involved directly or indirectly the District will be involved in
financial activities. For that reason it is important to we report ourselves in
a professional manner and we could be highly competitive and attract the
attention of financial buyers of debt and not be at the mercy of
underwriters. Mr. Gregg also noted that
the policies that the board has adopted have helped the District operate
financially sound.
We have other issues to report
regarding the State’s transfer of funds, more details will be given at a
regular meeting.
Upon a motion duly made and seconded,
the meeting was unanimously adjourned at
Kenneth A. Perry
President
Maria E. Alfaro
Administrative Services
Officer