HomeMy WebLinkAbout12-3 Attch 2B #3 Finance and Accounting for Board Meeting June 2012TITLE 3
FINANCE AND ACCOUNTING
CHAPTERS
Attachment 2B
6/6/2012
3.01
Financial Goals
3.02
Budget Control
3.04
Auditing
3.05
Governmental Accounting Standards Board (GASB)
3.06
Electric Supply Procurement
3.08
Purchasing
3.10
Capitalization Policy
3.12
Accounts Receivable
3.16
Accounts Payable
3.20
Investments
3.24
Restricted Funds
3.32
Standby Charges and Assessment Districts
CHAPTER 3.01
FINANCIAL GOALS
Section:
3.01.01 Financial Goals
3.01.01.1 The following goals are established to promote and maintain the financial
strength of the District:
3.01.01.01 Planning Goals
• Review Water and Electric Master Plans at least every five years
• Review ten year Finance Master Plan each year
• Prepare two-year operating budget with semi-annual reviews
• Prepare ten-year Capital Improvement Plan; update annually
• Review rate structure and levels at least once every three years
• Review Financial Goals every year
3.01.01.02 Revenue Goals
• Set operating revenues to capture entire cost to provide service plus build and
maintain reserves and satisfy debt coverage ratios
• Review connection charges each year and set them to recover all costs
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• Review facilities fees every budget cycle and after the completion of a master plan
3.01.01.03 Debt Goals
• Separate debt that is serving development (facilities fees), debt serving current
customers (rates), debt serving a special assessment district (assessments) and
debt financed by billing surcharges. These categories of debt should be separately
identified in the budget.
• One-half the debt service for all long-term debt in the aggregate is due in the first
ten years
• No more than one half the projected annual facilities fee revenue committed to debt
service
• No more than twenty-five percent of general fund revenues committed to debt
service
• No debt more than 25 year maturity
• No debt longer than useful life of the project
3.01.01.04 Cash Reserve Goals - Operations
• Water general fund should have a cash reserve equal to twice the highest month
budgeted expenditure (this will probably be the month in which principal and interest
on debt is due)
• Electric general fund should have a cash reserve equal to twice the highest month
budgeted expenditure (This will be the month in which the highest wholesale electric
bill is due plus the highest debt service payment)
• Electric rate stabilization fund (aka Electric Rate Reserve) should maintain a
balance of $3,000,000
3.01.01.05 Capital Reserve Goals
• There should be a revolving water capital reserve fund in the amount of $4,000,000
to permit projects to be initiated and funded prior to arrangement of long-term debt
or other financing.
• There should be an electric capital reserve fund in the amount of $1,000,000
minimum.
3.01.01.06 Debt Reserve Goals
• There should be a reserve fund for each debt instrument in an amount required by
each lender.
• A reserve fund should be established and maintained to pay for vehicle and
equipment purchases as needed. Long term financing should be used when
necessary and the life of the asset purchased is greater than 15 years.
CHAPTER 3.02
BUDGET CONTROL
Section:
3.02.010 Budget Control
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3.02.010.1 In 2008, for budget year 2009, and each two budget year periods thereafter, the
General Manager shall submit to the Board of Directors a draft budget in the format
approved by the Board of Directors and following generally accepted accounting standards
for utility budgets.
3.02.010.2 Budget performance will be reviewed at a Board workshop each six months
after the close of the June and December accounting periods during each fiscal year.
3.02.010.3 The General Manager shall cause to be prepared a memorandum
accompanying the semi-annual budget performance review which describes any significant
variance from planned expenditures and any projects or needs that have occurred since
adoption of the budget that were not anticipated at the time the budget was prepared and
adopted.
3.02.010.4 With respect to the capital budget, the General Manager is authorized to make
line item transfers within any one department, provided the total capital budget for that
department is not exceeded. If the General Manager determines that a capital expenditure
is necessary which will exceed that department's capital budget, he/she shall submit a
recommendation to the Board of Directors for a budget amendment.
3.02.010.5 When Department Heads request the Board to approve projects (operating or
capital), they will indicate in the description and presentation how much has been budgeted
for the project and if the costs are expected to exceed their budget, recommend where the
excess costs will be obtained.
CHAPTER 3.04
AUDITING
Section:
3.04.010 Auditing
3.04.010.1 Hiring of Auditors Periodically, the Board of Directors will issue a request for
proposal for the purpose of hiring an audit firm to perform the District's annual audit.
Auditors will be requested to provide an engagement letter describing services they will
perform and a three year financial proposal. At the end of the three year period, the Board
will issue a new request for proposal, or if the Board decides to continue the services of the
current auditors, it will ask the then current auditors for a proposal to extend their services.
3.04.010.2 Audit Performance The auditors will audit the District's records according to
generally accepted auditing standards for publicly owned utilities.
3.04.010.3 Audit Presentation The audit firm will present the results of the annual audit
to the Board of Directors at a Board meeting in draft form. The Board may adopt the audit
as presented or schedule the adoption of the annual audit at a future meeting.
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3.04.010.4 Publication of Annual Audit The annual audit shall be posted on the
District's website within 30 days after completion of the audit and approval by the Board.
The complete audit will be sent to the District's lenders and to any person or organization
that requests a copy. Duplication fees may apply.
CHAPTER 3.05
GOVERNMENT ACCOUNTING STANDARDS BOARD (GASB)
Periodically, the Government Accounting Standards Board (GASB) issues new accounting
rules for recording financial transactions that must be implemented by government
agencies. Each year, during the audit presentation process, any known new GASB
accounting standards that are required to be implemented during the current or future
years will be discussed with the Board of Directors. In the absence of GASB accounting
rules, the District is required to follow Financial Accounting Standards Board (FASB)
accounting rules to record accounting transactions.
CHAPTER 3.06
ELECTRIC SUPPLY PROCUREMENT
Sections:
3.06.000
General
3.06.010
Procurement Objectives
3.06.020
Commodity Pricing Policy
3.06.030
Counterparty Credit Policy
3.06.040
Transacting Policy
3.06.050
Authorized Transacting Products
3.06.060
Transacting Authority
3.06.070
Conflict of Interest
3.06.000 General It is the objective of the District to:
1. Provide reliable and high quality electric supply and distribution system to meet
current and future needs.
2. Assure that no activities related to energy supply purchase and sales will expose the
District to the possibility of large financial losses in relation to the size of the electric
supply reserve funds.
3. Maintain and implement a long-term energy and load forecast.
4. Maintain and implement an Electric System Master Plan, including the required
facilities to meet the current and future demand and reliable supply.
5. Procure and contract for low cost electric power supplies to reliably meet current
and future loads, consistent with the Renewable Portfolio Standards.
6. Seek power supply from a resource mix that satisfies District Renewable Portfolio
Standard (RPS), Code Section 7.83.
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3.06.000(A) RPS Supply Objectives:
1. Maintain reliable overall energy supply portfolio
2. Minimize adverse impact of acquiring new energy resources on customer electric
rates.
3. Renewable resources are defined as non -fossil fueled electric generating resources,
as defined pursuant to Public Utilities Code Section 399.3(i).
3.06.000(B) RPS Supply Strategies
1. Utilize Public Benefit funds to implement projects and to supplement appropriate
capital expense projects.
2. Strive to acquire small hydro and geothermal electric supply from WAPA, NCPA, or
UAMPS that are located within or can be transmitted to the Sierra Pacific control
area.
3.06.010 Procurement Objectives
1. Balance the need to purchase sufficient, reliable electric energy within District RPS
target (See Section 7.83.040) and the tolerance for risk established by the Board of
Directors.
2. Provide stable electric rates to customers.
3. Preserve a supply cost advantage.
4. Provide procurement control procedures that are sufficient to identify, evaluate and
manage risk.
3.06.020 Commodity Pricing Policy
1. The General Manager is responsible for implementing the Electric Supply
Procurement policy by overseeing the process of all rate schedule development and
ensuring that all procedures are followed consistently and that all transactions and
calculations are appropriately documented.
2. Commodity Pricing is composed of two principles:
a) Direct Cost Recovery
All direct costs of providing service will be recovered in rates.
b) Risk Management
To the extent practicable, contract terms must protect the District from major
negative contingencies.
3.06.030 Counterparty Credit Policy
The objective of the Counterparty Credit Policy is to minimize the potential adverse
financial impacts on the District in the event of a defaulting counterparty. The District will
strive to use Joint Power Agencies (NCPA or UAMPS) to check Counterparty Credit and
meet the objective of this policy.
The policy is to minimize the District's credit exposure and potential adverse financial
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impacts by:
1. Establishing credit risk management governance and oversight.
2. Providing a procedure to enable the District to qualify energy suppliers and transact
with approved counterparties in a uniform and equitable manner.
3. Providing counterparty transaction parameters (limits) to control and measure the
District's exposure to any one supplier, and
4. Implementing a mechanism to monitor and report on supply portfolio related
counterparty credit exposure.
This policy applies to market -based commodity transactions as well as to physical asset -
based transactions, such as transmission capacity and generation ownership.
3.06.040 Transacting Policy
3.06.040(A) Anti -Speculation
Speculative buying and selling of energy products is prohibited. Speculation is defined as
buying energy not needed for meeting forecasted load or selling energy that is not owned.
In no event shall transactions be entered into to speculate on market conditions.
3.06.040(B) Maximum Supply Transaction Term
The maximum term of any supply transaction, either purchase or sale, shall be ten years
exclusive of options to extend, unless specifically approved by the District Board of
Directors, to meet long-term portfolio planning objectives.
3.06.040(C) Portfolio Performance and Value Reporting
The Electric Utility Manager shall prepare performance reports containing analysis of
physical and financial positions of all electric contracts. Reports shall be annually, unless
the ratio of the market value of a contract falls outside the risk limits prescribed by the
District Board of Directors, then the General Manager shall inform the Board of this fact
and recommend actions.
3.06.040(D) Competitive Process
Whenever possible, the Electric Utility Manager with the assistance from NCPA or UAMPS
or other entities approved by the Board shall obtain three or more quotations when making
a purchase or sale transaction and select the best price from a responsible qualified
bidder.
3.06.040(E) Oversight
The Electric Utility Manager shall provide an oversight role along with the Administrative
Services Manager both reporting to the General Manager:
1. The Electric Utility Manager shall perform review of portfolio exposure, credit
exposure, transaction compliance and monitor risk limit compliance.
2. The Electric Utility Manager shall make recommendations to the General Manager
to temporarily or permanently halt transactions with one or more counterparties,
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exceptions to rules and procedures, or other operational exceptions that represent
unacceptable risk exposure.
3. The Administrative Services Manager shall review all transactions, exceptions, and
settlement payment accuracy, reporting findings to the General Manager.
3.06.050 Authorized Transactinq Products
Products allowed for electric transactions include energy, capacity, transmission and
ancillary service. Only physical transacting products are approved by the Board. Financial
products are explicitly prohibited.
Only the Electric Utility Manager, with General Manager's counter signature, is authorized
to perform a District energy transaction:
1. All transactions must be committed by authorized transaction personnel.
2. All transactions must be with approved counterparties with executed and Board
approved contracts.
3. All transactions must be with approved counterparties with adequate available
credit.
4. All transactions must be committed over recorded phone lines or via electronic mail.
5. All transactions must be for allowed transaction products.
6. All transactions must be consistent with Electric Supply Procurement policy.
Failure to observe and comply with this Policy when executing energy transactions is a
violation of District Code and is subject to disciplinary action.
3.06.060 Transacting Authority The General Manager has the authority to purchase and
sell energy products for terms of up to two years under open purchase contracts. Authority
to enter into transactions must be based on District Board of Directors approved contracts
such as master agreements, purchase agreements or other contractual forms. In all cases
the District Code provides the final authorization rules and regulations for energy
purchases.
3.06.070 Conflict of Interest Personnel involved in transacting and oversight of the
District energy supply resource acquisition products may not engage in financial conflicts of
interest, unless the District Board of Directors are duly informed and it elects to waive such
conflicts. All personnel in procuring or selecting counterparties for contracting or
transacting are required to complete, on an annual basis, the Form 700 Disclosure forms
and submit these forms to the District Clerk. The General Manager is responsible for
routinely reviewing the Form 700 of each personnel engaged in the supply resource
decision -making process for the purpose of identifying potential conflicts of interest. District
Counsel will assist the General Manager in reviewing these forms and providing legal
advice in connection with such reviews.
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CHAPTER 3.08 (3/4/09, Res 2009-10)
PURCHASING
Sections:
3.08.000
Notification to Board of Directors
3.08.005
Local Preference Procurement Policy
3.08.010
Bid Procedure for Purchase of Commodities or
Equipment Over $15,000
3.08.020
Procedure for Purchase of Commodities or
Equipment Under $15,000
3.08.030
Bid Procedure for Issuance of Service Contracts
Over $15,000
3.08.040
Procedure of Issuance of Service Contracts Under
$15,000
3.08.050
Procedure for Entering into an Agreement for
Special Services
3.08.060
Joint Purchasing with the State and Other Public
Agencies
3.08.070
Process and Procedure for Retention of Consulting
Services
3.08.080
Change Orders
3.08.090
Contractor Insurance Requirements
3.08.100
Procurement Authorization During an Emergency
3.08.000 Notification to Board Prior to or concurrent with going to bid or issuing an RFP,
staff will notify the Board of Directors.
3.08.005 Local Preference Procurement Policy It shall be the policy of the District to
encourage local businesses to provide goods and services to the District in order to
maintain a healthy local economy, to increase local competition, and to lower core costs of
goods and services. To facilitate this policy, the District shall make purchases in
accordance with the following guidelines:
3.08.005.1 Local preference for the purchases of eligible goods and services may be
allowed by providing a 5% local preference where the purchases or contracts with a
respective local vendor or business during any fiscal year do not exceed $100,000.
3.08.005.2 Proposals for services, by their nature, are evaluated based upon qualifications.
A 5% local preference shall be applied towards the fee component when scoring the
proposal.
3.08.005.3 In order to qualify for the above local preference, a vendor or business must
either 1) be a District rate payer in good standing for the past six months, or 2) receive
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District power or water at their business location for the past six months; paid by a third
party.
3.08.005.4 Eligible procurements are:
• Commodities or equipment up to $10,000;
• Public works contracts up to $15,000;
• Other service contracts up to $100,000;
• Special services up to $100,000; and
• Consulting services up to $100,000.
3.08.005.5 This policy shall be reviewed annually to ensure consistency with the overall
policy objectives.
3.08.010 Bid Procedure for Purchase of Commodities or Equipment Over $15,000
Prior to issuing a purchase order for the purchase of any commodity or equipment, the
dollar value of which is fifteen thousand dollars ($15,000) or greater, the provisions of the
Public Contract Code shall be followed, as more fully described in the following sections.
3.08.010.1 When a Department Manager or the authorized Buyer/Clerk determines that
there is a need to issue a purchase order, the amount of which is fifteen thousand dollars
($15,000) or greater, he/she shall notify the General Manager by memorandum which
states the purpose of the purchase, the budget or work order account number to be
charged and the specification of the item or items to be purchased.
3.08.010.2 The General Manager shall review the memorandum and, if he/she approves
the request, shall cause a public notice to be published in a local newspaper of general
circulation requesting interested parties to submit sealed bids. The bids shall be publicly
opened and read at the date and time and in the place specified in the public notice. The
notice will also be posted on the District's website.
3.08.010.3 After the bids have been opened, the General Manager shall submit the matter
to the Board of Directors with a recommendation regarding award of the purchase contract.
3.08.010.4 When calling for bids on equipment available locally, the public notice shall be a
small display ad in a local newspaper of general circulation. The notice will also be posted
on the District's website.
3.08.010.5 The General Manager shall establish procedures to properly manage the
process of notifying bidders of the results of the purchase and to implement the decision of
the Board.
3.08.010.6 Market Basket Purchase Approach For vendors from whom multiple items are
most likely to be bought, a "market basket" approach may be used to select the most
competitive vendor. This approach compares the aggregate cost for anticipated quantities
of items among vendors; the basis for selection is the lowest market basket cost. Should
the total anticipated purchases exceed $15,000, approval will be obtained by the Board.
3.08.010.7 Sole Source Vendors Certain vendors provide goods and equipment that are
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proprietary in nature such as certain utilities. For purchases that exceed $15,000, approval
will be obtained by the Board.
3.08.020 Procedure for Purchase of Commodities or Equipment Under $15,000 Prior
to issuing a purchase order for the purchase of any commodity or equipment, with a value
which exceeds ten thousand dollars ($10,000), but is less than fifteen thousand dollars
($15,000), the following procedures shall be followed:
3.08.020.1 The General Manager, a Department Manager or the authorized Buyer/Clerk is
authorized to issue a purchase order as defined in Section 3.08.020 after having first
secured three informal telephone quotes recorded in writing. In securing the quotes, the
vendors must be asked to state any price discount and any payment discount terms that
the vendor will offer the District. In the event that three quotes cannot be obtained, the
purchaser shall provide the General Manager with a written explanation and receive the
General Manager's approval prior to issuing the purchase order.
3.08.020.2 The purchase order shall be issued to the lowest responsive vendor taking into
consideration price and payment discount terms and delivery schedule.
3.08.020.3 Purchase orders for the purchase of commodities or equipment, with a value of
ten thousand dollars ($10,000) or less, may be issued by the General Manager, any
Department Head or the authorized Buyer/Clerk from any approved vendor after
considering price, terms and delivery schedule.
3.08.020.4 Should overruns or change orders expect to exceed authority of the party
issuing the purchase order, the next higher level of authority shall be notified for their
approval to continue.
3.08.030 Bid Procedure for Issuance of Service Contracts Over $15,000 Prior to
entering into a contract for services, with a value exceeding fifteen thousand dollars
($15,000), the following procedures shall be followed:
3.08.030.1 The term "services" includes, but is not limited to, construction, maintenance or
repair of District facilities, but does not include professional services such as legal,
engineering, architectural, landscape architecture, land surveying, construction project
management, accounting, financial, economic, energy advisory, information technology,
environmental, payroll services and administrative services as included within California
Government Code Sections 4525, 4526 and 53060.
3.08.030.2 When a Department Manager or the authorized Buyer/Clerk determines that
there is a need to issue a contract for a service to be performed the dollar amount of which
is fifteen thousand dollars ($15,000) or greater, he/she shall notify the General Manager by
memorandum which states the purpose of the service, the budget or work order account
number to be charged and the plan and/or specification of the service to be performed.
3.08.030.3 The General Manager shall review the memorandum and, subject to the
provisions of Section 3.08.030.4, if he/she approves of the service, shall cause a public
notice to be published in a local newspaper of general circulation requesting interested
parties to submit sealed bids. The bids shall be publicly opened and read at the date, time
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and location specified in the public notice. The notice will also be posted on the District's
website.
3.08.030.4 If the service is such that plans and/or specifications need to be prepared by a
consultant and the cost of the consulting service is fifteen thousand dollars ($15,000) or
greater, the General Manager shall submit the matter to the Board of Directors for approval
before authorizing the consultant to proceed.
3.08.030.5 If the service to be contracted is of a nature that will likely attract bids from local
service providers, the public notice shall be in small display ad form in a local newspaper of
general circulation. In addition, advertisements or notices may be made in appropriate trade
journals and depending on the scope of the project, copies of bid documents will be sent to
local plan room libraries. If the project is not likely to attract local bidders, the ad is to be
placed only in the public notice section of the newspaper and in appropriate trade journals.
In either case, the notice will be posted on the District's website.
3.08.030.6 After the bids have been opened, the General Manager shall submit the matter to
the Board of Directors for approval with a recommendation regarding award of the service
contract. This recommendation will include the bid award amount and a not to exceed
amount for change orders to be authorized by the General Manager.
3.08.030.7 The General Manager shall establish procedures to properly manage the process
of notifying bidders of the results of the award and to implement the decision of the Board.
3.08.030.8 Sole Source Vendors Certain vendors provide services that are proprietary in
nature such as utilities. For purchases that exceed $15,000, approval will be obtained by
the Board.
3.08.040 Procedure for Issuance of Service Contracts Under $15,000 Prior to issuance
of a contract for a service with a value less than fifteen thousand dollars ($15,000), the
following steps shall be followed:
3.08.040.1 The General Manager shall cause plans and/or specifications to be prepared.
3.08.040.2 Three informal telephone quotes shall be secured in writing. In securing quotes,
the contractor shall be asked to state any price or payment discounts and a completion date.
3.08.040.3 The contract shall be awarded by the General Manager to the lowest responsive
service provider taking into consideration price and completion date.
3.08.040.4 The General Manager may renegotiate and/or renew contracts upon their
expiration.
3.08.040.5 Should overruns or change orders expect to cause the service contract to
become $15,000 or greater, the General Manager shall notify the Board of Directors for its
approval to continue.
3.08.050 Procedure for Entering into an Agreement for Special Services Prior to
entering into an agreement for special services, the following procedures shall be followed:
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3.08.050.1 The term "special services" includes, but is not limited to professional services,
such as legal, engineering, architectural, landscape architecture, land surveying,
construction project management, accounting, financial, economic, energy advisory,
information technology, environmental, payroll services and administrative services, as
included within California Government Code Sections 4525, 4526 and 53060.
3.08.050.2 When a Department Manager determines that there is a need to issue an
agreement for special services to be performed, he/she shall notify the General Manager by
memorandum which states the purpose of the special services, the budget or work order
account number to be charged and the plan of the special services to be performed.
3.08.050.3 The General Manager shall review the memorandum and if he/she approves the
special services, shall determine whether to enter into the agreement for special services
with or without seeking proposals from potential special service providers.
3.08.050.4 If the General Manager determines that no proposals are necessary, then he/she
may enter into an agreement for the special services up to his/her Board authorized
spending limit. Should the amount exceed the General Manager's spending limit, approval
to enter into an agreement will be brought to the Board of Directors for their consideration.
3.08.050.5 If the General Manager determines that proposals are necessary, then he/she
shall follow the procedures set forth in 3.08.070.3 through 3.08.070.13 for preparing and
issuing a Request for Proposals (RFP) and reviewing proposals.
3.08.060 Joint Purchasing with the State of California and Other Public Agencies The
District may purchase materials, equipment, supplies, information technology products and
services through the State of California procurement program and jointly with other public
agencies in accordance with the following procedures.
3.08.060.1 Notwithstanding any other provision of this Chapter, the District may purchase
materials, equipment or supplies, other than printed material, from the State of California
through its procurement program under Public Contract Code Section 10324 and jointly with
other public agencies, provided that:
3.08.060.1(A) The District approves specifications for any purchase of materials, equipment
or supplies, information technology products and services;
3.08.060.1(B) The cost of such items is fifteen thousand dollars ($15,000) or more and the
purchase is approved by the Board of Directors;
3.08.060.1(C) The State or public agency has solicited or advertised for bids in a manner
which complies with the competitive bidding requirements applicable to the District; and
3.08.060.1(D) The State or public agency purchases such items at a price reasonably
expected to be lower than the District can obtain through its purchasing procedures.
3.08.060.2 The District shall reimburse the State or other public agency for any charge made
to the District for purchasing services.
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3.08.060.3 Notwithstanding any other provisions of this Chapter, the District may purchase
materials, equipment, supplies, information technology products, programs and services
other than printed material, from the State of California through its procurement program,
or jointly with other public agencies, when the cost of such items is less than fifteen
thousand dollars ($15,000) when the District determines that it is in its best interests to do
so.
3.08.070 Process and Procedure for Retention of Consulting Services
3.08.070.1 Department Manager determines need for outside consulting services.
3.08.070.2 Department Manager discusses need for consultant with the General Manager.
3.08.070.3 Upon the General Manager approval, the Department Manager and
departmental staff create a draft Request for Proposals (RFP) for review by the General
Manager. The draft RFP shall include a proposed scope of work and general description of
evaluation criteria to be used in reviewing the proposals. The weighting of the specific
evaluation criteria shall be included in the RFP. The RFP shall require a separate
Technical Proposal and a Cost Proposal sealed in separate envelopes.
3.08.070.4 The Contracts Administrative Clerk (CAC) shall begin advertising the RFP. A
notice of the RFP shall be mailed to consultants known to perform the required services
and when appropriate to the A/E Consultants Information Network. A notice of the RFP
shall also be published in a local newspaper of general circulation and shall be posted on
the District's website.
3.08.070.5 A staff committee shall be created to review the proposals. The committee
shall include staff from at least two separate Departments (Electric, Water, Administrative
Services). The exact makeup of the committee shall be determined by the General
Manager and Department Manager seeking the consulting services.
3.08.070.6 The General Manager and Department Manager shall finalize the proposal
evaluation criteria and the weighting to be given to each component.
3.08.070.7 After receiving proposals, they shall be held in the custody of the CAC. The
CAC shall distribute copies of all Technical Proposals to the staff committee members for
individual review.
3.08.070.8 The staff committee shall then hold a meeting to discuss the various proposals
and to rank the consultants based upon demonstrated competence, professional
qualifications and technical merit using the approved evaluation criteria.
3.08.070.9 At the same meeting, after completion of the technical rankings, the Cost
Proposals shall be opened and reviewed by the staff committee members. This review
shall ensure that the man hours, hourly rates, services and indirect costs given in the Cost
Proposal correspond to the level of effort described in the Technical Proposal and to the
level of effort expected by the District to perform the anticipated work.
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3.08.070.10 The staff committee shall meet to discuss both the Technical and Cost
Proposals and determine a short list of consultants to be interviewed by the staff
committee.
3.08.070.11 After final review of the proposals, the staff committee may determine that a
given consultant is clearly superior to the other consultants and may recommend to the
General Manager that interviews are not necessary. The staff committee may also
determine that the proposed scope of work or the expected cost is such that conducting
interviews will not yield significant information for the staff committee to consider and
similarly recommend to the General Manager that interviews are not necessary.
3.08.070.12 When interviews are to be conducted, the CAC shall contact the short-listed
consultants and schedule interviews. The date, time and duration of the interviews shall be
determined by the Department Manager in conjunction with the staff committee. The staff
committee shall also create a proposed outline and list of any questions to be posed to the
short listed consultants.
3.08.070.13 After completion of the interviews, the staff committee shall determine a
recommended consultant for presentation to the Board of Directors. This recommendation
shall be based upon the individual consultant's weighted scoring and their overall proposed
cost.
3.08.070.14 The Department Manager shall prepare a memorandum and appropriate
documentation for presentation to the Board. The memorandum shall summarize the
following:
• Work to be performed by the Consultant.
• Number of proposals received.
• Ranking of consultants on a technical basis.
• Recommended Consultant and expected cost thereof.
• If the recommended consultant is not the Number 1 ranked firm on technical merit, the
memorandum shall describe the rationale used to develop the recommendation.
3.08.080 Change Orders The District cannot afford to maintain a large enough
construction crew or all types of service related skills to be able to undertake all projects
and services in-house. Therefore, it relies on contractors and service providers to perform
work. These contractors and service providers perform work in accordance with plans and
specifications and based on a fixed price contract.
There are occasionally circumstances encountered after a contractor or service provider
has begun work that requires a change in the plans and specifications or scope of work
and result in a change in the contract price. These changes are generally matters that
could not be anticipated nor planned during the design and specification phase of the
project.
The contract change order is the procedure whereby plans and specifications or scope of
work and contract price can be changed after the contract is executed and work has
commenced. The Board of Directors authorizes the execution of contract change orders
when the total cost of the change orders will be $15,000 or greater.
Title 3 Page 14
Most contract change orders are such that their consideration by the Board can wait for a
regular Board meeting. However, under certain circumstances it is to the District's benefit
to permit the General Manager to authorize the Department Head to proceed with change
order work or to request a special board meeting to consider the matter.
Work can proceed on a contract change order prior to being reviewed by the Board of
Directors under the following circumstances:
3.08.080.1 When a delay in making the decision to change the contract would impose an
unreasonable financial burden on the District.
3.08.080.2 When the need for the change is so compelling that to proceed with the project
as originally planned is impossible or would be financially burdensome on the District.
3.08.080.3 When the amount of the change order price is less than 5% of the original
approved contract price.
3.08.080.4 At the time of award of a contract, the Board may pre -approve change order
contingencies up to a defined percentage of the contract or a defined dollar amount.
Change order contingency authority which has been approved by the Board, will be
administered by the General Manager up to the pre -approved limit.
3.08.080.5 The exercise of this prerogative should be done with discretion and in the
following manner:
3.08.080.5(A) A memorandum should be prepared setting forth the precise circumstances
justifying the change in plans and specifications or scope of work and should justify the
change in contract price.
3.08.080.5(B) The memorandum should be signed by the Department Head and General
Manager and forwarded within 48 hours to each Director.
3.08.080.5(C) A contract change order should be prepared for consideration by the Board
of Directors at its next regular meeting or at a special meeting if one is called.
3.08.090 Contractor Insurance Requirements It is the policy of the District to require
contractors and service providers performing work for the District to maintain appropriate
insurance naming the District as an additional insured.
3.08.090.1 The form of insurance shall be broad form comprehensive general liability
which includes coverage for bodily injury, property damage, and products -completed
operations; automobile liability where applicable; workers compensation. Additionally,
service providers may be required to include errors and omissions coverage.
3.08.090.2 The minimum amount of insurance shall be $2,000,000 per occurrence and
$4,000,000 in the aggregate. The General Manager shall consult with the insurance broker
of record and/or an independent risk manager for advice on the insurance requirements for
contracts that exceed $10,000, or that pose risk that, in the judgment of the General
Manager, warrant more than the minimum insurance.
Title 3 Page 15
3.08.090.3 The General Manager shall, after consulting with the insurance broker of record
and/or an independent risk manager, specify insurance requirements in contracts he/she is
authorized to let; or, in the case of contracts that must be let by Board action, the General
Manager shall, after consulting with the insurance broker of record and/or an independent
risk manager, recommend insurance requirements to the Board of Directors.
3.08.100 Procurement Authorization During an Emergency
3.08.100.1 An "emergency" is a situation which poses an immediate risk to health, life,
property or environment. Most emergencies require urgent intervention to prevent
worsening of the situation. It is the General Manager's responsibility to take immediate
action to protect employees, customers and District property during an emergency.
3.08.100.2 During an emergency, the General Manager is authorized to repair or replace a
public facility, take any directly related and immediate action required by that emergency,
and procure the necessary equipment, services, and supplies for those purposes, without
immediate Board approval and without giving notice for bids to let contracts.
3.08.100.3 The General Manager will report to the Board of Directors within 48 hours any
and all actions taken to deal with the emergency.
3.08.100.4 If the General Manager takes any action to manage the emergency that would
otherwise require competitive bidding, the Board shall initially review the emergency action
taken not later than seven days after the action or, at its next regularly scheduled meeting if
that meeting will occur not later than 14 days after the action, and at least at every regularly
scheduled meeting thereafter until the action is terminated, to determine, by a four -fifths
vote, that there is a need to continue the action, unless the General Manager has
terminated that action prior to the Board reviewing the status of the emergency.
3.08.100.5 It is the District's intent to comply with all sections of the Public Contract Code
Section 22050 in managing emergency situations.
CHAPTER 3.10
CAPITALIZATION POLICY
Sections:
3.10.010 Procedures
3.10.020 Capitalization requirements
3.10.010 Procedures shall be followed in determining which purchases should be
capitalized or expensed in the year purchased in accordance with generally accepted
accounting practices.
3.10.020 The following criteria shall be used to determine the capitalization of an asset:
1. The normal useful life of the item is at least two years from date of purchase.
Title 3 Page 16
2. The item has an acquisition cost (including freight and installation) of at least the
$10,000.
3. The item will not be substantially reduced in value by immediate use.
4. In case of repair, the outlay will substantially prolong the life of an existing fixed
asset or increase its productivity significantly, rather than merely returning the asset
to a functioning unit or making repairs of a routine nature.
5. Land purchases and land rights must always be capitalized regardless of cost.
CHAPTER 3.12
ACCOUNTS RECEIVABLE
Sections:
3.12.010 Miscellaneous Account Billings
3.12.020 Delinquent Accounts Receivable
3.12.010 Miscellaneous Account Billings A miscellaneous account is a bill rendered by
the District to a party to whom the District has rendered a service or provided a good for
which the District charges a fee but shall not be any service or good which is billed to a
customer of the District through the normal monthly utility billing system.
It is the policy of the District to protect the assets of the District by promptly issuing bills for
goods or services rendered, and by following well established follow-up procedures to
insure that bills are paid in a timely manner.
3.12.010.1 This policy shall apply to the billing and collection of miscellaneous accounts.
3.12.010.2 When any Department of the District notifies the Administrative Services
Department that a billable service or good has been provided, the Administrative Services
Department shall promptly render a bill to the appropriate party. The miscellaneous
account bill is due and payable 30 days after the billing date.
3.12.010.3 If the bill remains unpaid after 30 days, the bill shall be considered delinquent
and shall be assessed a late charge in accordance with current District policy, and a
second request for payment shall be promptly mailed.
3.12.010.4 If the bill remains unpaid after 60 days, the General Manager shall cause
collection proceedings to commence, which may include initiation of action at Small Claims
Court.
3.12.010.5 The General Manager is authorized to act within his/her discretion to alter the
time periods set forth in this policy when a miscellaneous account customer is cooperating
with the District in resolving an unpaid bill.
3.12.020 Delinquent Accounts Receivable At the end of June and December of each
year, the District Treasurer will have identified all delinquent accounts receivable on closed
accounts that are considered uncollectible that exist on the District's records for six months
or more. Any customer who is making payments on his/her delinquent account will not be
Title 3 Page 17
added to the delinquent account list until the customer stops making agreed upon
payments.
3.12.020.1 The District Treasurer is authorized to write off delinquent accounts up to 1/6%
of the annual amounts billed from the District's accounts receivable balance.
3.12.020.2 The District Treasurer will include in the monthly Treasurer's Report the details
of the accounts written off including the customer names and the dollar amounts being
written off.
3.12.020.3 Should delinquent accounts exceed the authorized limit (1/6% of the annual
amounts billed from the District's accounts receivable balance), the request for approval to
write off such accounts shall come before the Board of Directors for consideration.
CHAPTER 3.16
ACCOUNTS PAYABLE
Sections:
3.16.010 Pre -authorized Disbursements
3.16.020 Bills for Board Approval
3.16.030 Accounts Payable
3.16.010 Pre -authorized Disbursements
3.16.010.1 The District Treasurer shall be empowered to issue checks, with authorization
from the approving authority, without prior Board approval for the following items:
3.16.010.1(A) Consumer deposits - deposit refunds with interest; reduction of deposits.
3.16.010.1(B) Refunds - credit balances, overpayments, refund of connection, facilities
fees and tap fees where the customer has decided not to build and the District staff has not
incurred any expense and line extension refunds.
3.16.010.1(C) Contracts - maintenance contracts on District equipment; payments on
leased equipment and land; payments on contracts for software support services;
payments for contracts issued pursuant to Section 3.08.040 of this policy including
contracts for consulting and construction services.
3.16.010.1(D) District Board of Directors - monthly compensation.
3.16.010.1(E) District credit card payments. In the event a dispute occurs, the settlement
will be handled by the parties involved.
3.16.010.1(F) Employee benefits previously approved by the Board including: deferred
compensation deposit; pension payments (401 a, 457 and CaIPERS); vision
reimbursements and any other payment or reimbursement pursuant to the District's
Title 3 Page 18
agreement with the International Brotherhood of Electrical Workers, Local 1245 and
employee benefits authorized in the District's Code 4 Personnel for management/exempt
employees.
3.16.010.1(G) Expense checks -advances for meetings, seminars, conferences, etc., for
staff, General Manager and Board of Directors. Reimbursement for mileage and approved
out of pocket expenses in accordance with the Districts Title 4 expense reimbursement
policy.
3.16.010.1(H) Insurance - life, health, disability and dental premiums.
3.16.010.1(1) Payroll - employee checks, payroll transfers, meals, union dues, employee
savings deductions, workers compensation insurance, payroll tax withholding, employer
taxes and any other employer payroll obligations.
3.16.010.1(K) Postage - Postage including stamps, trust fund, postage meter and bulk
mailing permit deposits.
3.16.010.1(L) Repayment of internal loans approved by the Board (journal entry only; no
actual check).
3.16.010.1(M) Loans - Repayment of loans that have been approved by the Board of
Directors. Where practicable, the payment will be sent by ACH or wire transfer to the
lending institution on or before the payment due date.
3.16.010.1(N) State Board of Equalization - sales tax, use tax and energy surcharges
collected.
3.16.010.1(0) Wholesale power expenses including, but not limited to, the Northern
California Power Agency, the District's current Board approved wholesale power supplier
and Sierra Pacific Power Company. Payments may be by ACH or wire transfer to the bank
account number provided by the vendor.
3.16.010.1(P) Bid items - where the Board has authorized a bid purchase and the invoice
excluding sales tax and shipping charges is less than or equal to the authorized contract.
Amounts billed above the bid amount must be approved by the General Manager or the
Board.
3.16.010.1(Q) Monthly and annual building utility expenses for telephone, garbage,
heating, sewer collection and treatment (TTSA and TSD), cable, Internet and utility bills
paid to other agencies such as electric utility bills for pump stations and wells.
3.16.010.1(R) Items approved by the Board: Any items that have been approved by the
Board at a scheduled board meeting (e.g. property and liability insurance renewal).
3.16.010.1(S) The General Manager may approve payments required in an unpredicted
emergency situation with subsequent notification to the Board.
3.16.010.2 Upon direction of the General Manager and receipt of an appropriate, signed
Title 3 Page 19
authorization in accordance with Section 3.08.010 of this policy, the District Treasurer shall
be empowered to issue checks up to $15,000 and, in instances where the Board of
Directors has issued authorization for an expenditure of $15,000 or greater.
3.16.010.3 All checks issued in any of the above categories will appear in the accounts
payable check register provided in the monthly Treasurer's Report to the Board of Directors
for approval. Supporting documents will also be available for Board review in the
Administrative Services Department.
3.16.020 Bills for Board Approval Bills which may be controversial should be listed as a
special agenda item accompanied with the General Manager recommendation.
3.16.030 Accounts Payable
3.16.030.1 Upon presentation of invoices for goods and services and other financial
obligations of the District in the format prescribed in Title 3, Chapter 3.08, Purchasing, to
the Administrative Service Department, the Treasurer shall be authorized to issue payment
for such invoices
3.16.030.2 All payments for District financial obligations shall be processed through the
District's computerized accounts payable program. Prior to issuing checks, the District's
Accounts Payable Clerk will verify the entries for accuracy including verifying that the
correct vendor has been keyed into the system; that the amount of charges are correct and
that the total of the invoice is correct; that the sales and use tax has been calculated
correctly; that the appropriate authorization appears on the invoice; that the correct work
order number and account number or account number and activity code have been
assigned to the charges; and that the correct supporting documents are attached to the
invoice. The Accounts Payable Clerk will also verify that invoices greater than $10,000
have been approved by the General Manager and that invoices $15,000 and greater have
a Board authorized Minute Order attached showing the amount of the approved
expenditure or prior Board authorization for regular District expenditures as listed in Title 3,
Chapter 3.16.010, Pre -authorized Disbursements.
3.16.030.3 After verifying that the above items are in order, the Accounts Payable Clerk will
run the checks for payment and print a check register listing the number of each check
issued, the vendor paid, the amount of the charges and the amount of the total check. In
order for the Accounts Payable Clerk to print checks, the Treasurer will also have to log
onto the District's computerized check printing and banking software and key in his/her
confidential password.
3.16.030.4 Before any payments, ACH transfers or wire transfers are released, the
Treasurer will then verify that the accounts payable check register and the individual
invoices match, that the invoices have been properly processed and that the expenditures
have been made in accordance with the District's purchasing procedures. The Treasurer
then authorizes the payment, ACH or wire transfer of funds using a secure program linked
to the District's bank account.
3.16.030.6 In the event that a manual check needs to be issued outside of the automated
check run process, the check will require two signatures. The two signatures can be any
Title 3 Page 20
two Board authorized checking account signatures.
3.16.030.7 The Treasurer shall provide reports to the Board.
3.16.030.7(A) At the first regular meeting after the end of each month held by the Board of
Directors, the Board will be presented with
3.16.030.7(A)(1) An accounts payable check register showing all of the checks issued for
the accounting period being presented; an investment report showing the status of the
District restricted funds; and a fund status report showing the location of all District funds
and the amount on deposit at each financial institution or organization.
3.16.030.7(B) The details of all checks issued and invoices paid shall be available for
review by any Director in the Administrative Services Department. The Board shall officially
authorize payment of all disbursements that have been made by the Treasurer and
presented on the accounts payable check register at a board meeting, monthly.
3.16.030.7(C) The Treasurer shall list on the agenda any invoice for purchases that have
not been made in accordance with the District's purchasing policies as set forth in Title 3,
Chapter 3.08 Purchasing.
3.16.030.7(D) Statement of the general fund showing the beginning checking account
balance, the categories of cash received by the District during the month, a summary list of
the cash disbursements made during the month, any authorized transfers in or out of the
general fund and the ending balance at the end of the month.
3.16.030.7(E) Semi-annual budget reports showing the status of budgeted expenditures
compared to actual expenditures will be presented at a board workshop after the close of
the June and December financial records.
3.16.030.7(F) Semi-annual financial statements showing the status of all revenues and
expenditures in the format of financial statements using generally accepted accounting
principles for utilities after the close of the June and December financial records.
CHAPTER 3.20
INVESTMENTS
Sections:
3.20.005
Local Agency Investment Fund Investments
3.20.008
Fund Transfers
3.20.010
Investment of Surplus Funds
3.20.012
Investment Policy
3.20.005 Local Agency Investment Fund Investments
Title 3 Page 21
3.20.005.1 Authorization has been given for the deposit and withdrawal of monies in the
Local Agency Investment Fund (LAIF) in the State Treasury in accordance with the
provisions of Section 16429.1 of the Government Code for the purpose of investment as
stated therein.
3.20.005.2 Any two of the following officers or employees of the District, the President of
the Board, the General Manager or the Treasurer, may execute documents to add or
delete District accounts and authorized persons to make transfers to and from those
accounts with the LAIF.
3.20.008 Fund Transfers
3.20.008.1 The Board approved commercial bank (Bank) is requested to honor, execute
and process the District's telephonic, electronic, written or oral requests for the transfer of
funds between the accounts of the District at Bank and the Local Agency Investment Fund,
subject to such terms and conditions as may from time to time be agreed upon by the
District.
3.20.008.2 Any one of the following listed officers or employees of the District, the
President of the Board, the General Manager or the Treasurer are hereby authorized,
directed and empowered for and on behalf of and in the name of the District as follows:
3.20.008.2(A) To execute agreements with the Bank providing for such funds transfers
and to make and verify requests for such transfers, and the Bank shall be entitled to honor
and charge this District for all such requests, when given (or purported to be given) by any
one of the above.
3.20.008.2(B) To make, execute and deliver such other agreements as may be required
by the Bank; and
3.20.008.2(C) To perform or cause to be performed all further acts and execute and
deliver all further instruments which Bank may deem necessary to carry out the purposes
of this policy.
3.20.008.3 The District hereby ratifies and confirms the acts of its officers, agents or
employees in heretofore requesting transfers of funds from this District's accounts with the
Bank by wire or comparable transfer together with any acts performed in relation hereto.
3.20.008.4 That the Clerk of the District is hereby authorized and directed to execute,
acknowledge and deliver a certified copy of the Resolution related hereto to the Bank and
any other person or agency which may require copies, and that the certification of the
(Secretary) Clerk as to the signatures of the above named officers will be binding on this
District.
3.20.008.5 That the Bank is authorized to act upon this policy until written notice of the
revocation thereof by a resolution duly adopted by the Board of Directors of this District is
delivered to the Bank, such revocation is in no way to affect the obligations of this District
to the Bank incurred pursuant to the terms of this policy prior to receipt by the Bank of such
notice or revocation.
Title 3 Page 22
3.20.010 Investment of Surplus Funds The District Treasurer shall invest surplus funds,
both restricted and general, pursuant to the District's Investment Policy (District Code
3.20.12). A regular accounting of all fund activities shall be presented to the Board of
Directors in the monthly Treasurer's Report.
3.20.012 Investment Policy
3.20.012.1 Investment Authority In accordance with Section 53600 et seq. of the
Government Code of the State of California, the authority to invest public funds is expressly
delegated to the Board of Directors for subsequent delegation to the Treasurer. The
Treasurer of the District receives direction and authority to invest any and all District funds
from the Board of Directors of the District.
3.20.012.2 Statement of Objectives Per section 53600.5 of the California Government
Code, the primary objective of the Treasurer shall be to safeguard the principal of the funds
under his/her control when investing public funds. The secondary objective shall be to
meet all liquidity requirements and the third objective shall be to achieve an acceptable
return on the funds under his/her control.
In order of priority, three fundamental criteria shall be followed in the investment program:
Safety - Safety of principal is the foremost objective of the investment program.
Investments shall be undertaken in a manner that seeks to ensure the preservation
of capital in the overall portfolio. The objective will be to mitigate credit risk and
interest rate risk.
a) Credit Risk: The District will minimize credit risk, the risk of loss due to the failure
of the security issuer or backer, by:
i. Limiting investments to the safest types of securities.
ii. Pre -qualifying the financial institutions, broker/dealers, intermediaries and
advisers with which the District will do business (custodial risk).
iii. Diversifying the investment portfolio so that potential losses on individual
securities will be minimized (concentration of risk).
b) Interest Rate Risk: The District will minimize the risk that the market value of
securities in the portfolio will fall due to changes in general interest rates, by:
i. Structuring the investment portfolio so that securities mature to meet cash
requirements for ongoing operations, thereby avoiding the need to sell
securities on the open market prior to maturity.
ii. Investing operating funds primarily in shorter -term securities, money market
mutual funds, or similar investment pools.
2. Liquidity— In an effort to ensure that the District's portfolio will be sufficiently liquid to
meet current and anticipated operating requirements, periodic cash flow analysis will
Title 3 Page 23
be performed. Investments shall be made so that the maturity date is compatible
with cash flow needs and safety of principal.
3. Yield — Investments shall be undertaken to produce an acceptable rate of return
after first considering safety of principal and liquidity and the prudent investor
standard.
Investment Strategy — The portfolio will be managed to meet the District's
cash flow needs. The maximum maturity of any security will not exceed 5
years except as specifically noted below. All investment activity shall be
consistent with prudent investor standard and in accordance with the
authorized investments included under District Code 3.20.012.5.
3.20.012.3 Prudent Investor Standard As applicable to the District, the prudent investor
standard is a standard of conduct whereby any person authorized to make investment
decisions on behalf of the District acts with care, skill, prudence and diligence under the
circumstances then prevailing, including but not limited to, the general economic conditions
and the anticipated needs of the District, that a prudent person acting in like capacity and
familiarity with those matters would use in the conduct of funds of a like character and with
like aims, to safeguard the principal and meet the liquidity needs of the District.
3.20.012.4 Portfolio Any reference to the portfolio shall mean the total of the District's cash
and securities under management by the Treasurer.
Except for cash in certain Board designated, restricted and special funds, the
District will consolidate cash and reserve balances from all funds to maximize
investment earnings and to increase efficiencies with regard to investment
pricing, safekeeping, and administration. Investment income will be allocated
to the various funds or accounts based on their respective participation and
in accordance with generally accepted accounting principles.
The Treasurer may invest in any security authorized for investment under the California
Government Code, subject to the limitations described herein:
1. Maturity Limitations —
a) The aggregate maturity of the total portfolio must not exceed five (5) years for
the general operating funds of the District.
b) Funds which represent debt service reserve funds may be invested up to a term
of ten years, as long as the period invested does not exceed the term of the debt
repayment.
c) Investments of restricted funds held for the Donner Lake Assessment District
that are not expected to be needed to pay debt service on the SRF loan may be
invested up to the term of the SRF loan.
d) Construction funds may be invested to mature on or before the date funds are
expected to be needed for construction purposes.
2. Investment Transactions — the purchase of any investment other than those
purchased directly from the issuer shall be, to the extent possible, from a firm
designated as a Primary Dealer by the Federal Reserve of New York.
Title 3 Page 24
3. Sale of Securities — Securities may be sold to provide needed liquidity, to
restructure the portfolio to reduce risk or to increase the expected return of the
portfolio. In no instance shall a sale of securities be used for speculative purposes.
All sales are to be reported to the Board on a monthly basis.
4. Prohibited Investments — Prohibited investments include inverse floaters, range
notes, interest only strips derived from a pool of mortgages (Collateralized Mortgage
Obligations), and any security that could result in zero interest accrual if held to
maturity. (Zero interest accrual means the security has the potential to realize zero
earnings depending upon the structure of the security. Zero coupon bonds and
similar investments that start below the face value are legal because their value
does increase.)
5. Safekeeping
a) All securities transactions entered into by the District shall be conducted on a
delivery versus payment (DVP) basis.
b) Securities shall be held by an independent custodian designated by the
Treasurer and held in safekeeping pursuant to a safekeeping agreement.
c) All financial institutions which provide safekeeping services for the District shall
be required to provide reports or safekeeping receipts directly to the Treasurer to
verify securities taken into their possession.
3.20.012.5 Authorized Investments
1. The District's authorized commercial bank in an interest bearing checking or savings
account. The Treasurer is authorized to make daily deposits and withdrawals for
purposes of the safekeeping of District monies and payments of District financial
obligations.
2. Local Agency Investment Fund (LAIF) Deposits for the purpose of investment in
the Local Agency Investment Fund of the State of California Treasury may be made
up to the maximum amount permitted by State Treasury policy. Any LAIF
investments made by the District shall be considered to be short-term in nature
even if the LAIF has invested in individual longer -term securities. The Treasurer is
authorized to make regular transfers to and from LAIF up to the limit of transactions
established by the LAIF investment policy for purposes of meeting the District's daily
cash flow needs and earning interest on surplus funds.
3. Any other investments authorized and listed in the Government Code Sections
53600-53609. The Treasurer will consult with the Board of Directors when
recommending any of the investments within these sections other than subsections
1 and 2 above. From time to time, the Board may also consult with an investment
professional pursuant to Title 3.20.012.2 Section 1 a) ii. Each investment will be
specifically authorized by the Board of Directors.
4. Bond proceeds and reserve funds will be invested only in permitted investments or
authorized investments defined in the Trust Agreement for each particular financing
which has previously been approved by the Board of Directors (Government Code
Title 3 Page 25
Section 53601 1). The Treasurer will consult with the Financial Advisor or Trustee on
the financing for investment recommendations to submit to the Board of Directors
for approval. The Treasurer is authorized to invest funds in a money market fund or
LAIF with the Trustee pending investment of those funds in a longer -term
investment, which will be approved by the Board of Directors.
3.20.012.6 Reporting In accordance with Section 53646 of the California Government
Code, the Treasurer shall submit a quarterly report to the Board of Directors within 30 days
following the end of the quarter covered by the report. The report shall include investment
activity, including yield and earnings, and the status of cash by depository.
3.20.012.7 Internal Controls Annually, the District will have an independent audit by an
external auditor. This audit will provide internal control by assuring compliance with
policies and procedures.
3.20.012.9 Annual Review of Investment Policy The Investment Policy shall be submitted
at least annually to the Board of Directors for adoption. The policy shall be reviewed
annually to ensure its consistency with the overall objectives of preservation of principal,
liquidity, yield and its relevance to current law and financial and economic trends. The
review will also include the review of the diversification of the investments in the portfolio
and the custodial risk of the portfolio. Any modifications made thereto must be approved
by the Board of Directors.
CHAPTER 3.24
RESTRICTED FUNDS
Sections:
3.24.010 Restricted Funds
3.24.010.1 The Board of Directors will direct staff when monies collected by the District are
to be considered as restricted funds.
3.24.010.1 (A) Board Designated Restricted Funds are those funds restricted by Board
action and which the Board can change the purpose of the designation at any time.
3.24.010.1 (B) Restricted Funds are those funds that are restricted by contract or
agreement with the District such as a loan reserve fund.
3.24.010.2 Restricted funds will be invested pursuant to the District's investment policy as
described in Chapter 3.20, Investments.
3.24.010.3 All interest earned upon said restricted funds shall adopt a character of and
become part of the specific restricted account unless otherwise directed by the Board of
Directors. In the case of loan reserve funds whose balances are greater than the reserve
requirement, the surplus funds may be used to offset the principal and interest payments
Title 3 Page 26
on the loan.
3.24.010.4 Expenditures from restricted funds shall be authorized by the Board of
Directors. From time to time, the Board may pre -approve transfers from restricted funds in
advance that pertain to specific projects or activities.
3.24.010.5 The District's Treasurer will include a monthly report on the activity of the
restricted funds accounts along with the monthly Treasurer's Report.
CHAPTER 3.32
STANDBY CHARGES AND ASSESSMENT DISTRICTS
Sections:
3.32.010 Collection of Delinquent Assessments
3.32.020 Standby Charges
3.32.010 Collections of Delinquent Assessments The following procedure is to be used
by the District staff in connection with the collection of delinquent assessments.
Assessments are due on November first and February first of each year, and are
delinquent after December tenth and April tenth, respectively.
Following is the procedure the District has adopted for collecting delinquent assessment
payments:
3.32.010.1 By January thirty-first and May thirty-first of each year or as soon as the county
records are available, the District Treasurer will contact the County Tax Collector's Office
and determine whether any assessments are delinquent and, if so, the amount of any such
delinquency. The District Treasurer will then immediately send a collection letter,
requesting payment within fifteen days.
3.32.010.2 If not paid within fifteen days of the collection letter, the District Treasurer will
send, by certified mail, a demand letter. This letter will demand payment within ten days,
and will indicate that, if not paid, the matter will be referred to District Foreclosure Counsel
for initiation of foreclosure proceedings against the delinquent parcel. A list of delinquent
parcels will be presented to the Board for authorization to proceed with the foreclosure
process.
3.32.010.3 The Board may authorize a third party company who specializes in performing
services listed in section 3.32.010.1 and 3.32.010.2 to work with the District staff to bill and
collect assessment monies due.
3.32.010.4 The Board may authorize the use of foreclosure counsel to proceed with the
foreclosure process pursuant to California State law and the requirements of any debt
instruments where the debt is secured by assessment payments. Staff will keep the Board
informed throughout the foreclosure process.
Title 3 Page 27
3.32.010.5 The County requires the District to remove delinquent Communities Facilities
District parcels from the County tax roll on or about June 30t of each County fiscal year.
The District Treasurer will authorize the County to remove the delinquent parcels from the
County tax roll before referring delinquent parcels to foreclosure counsel. Removal of a
delinquent parcel from the County tax roll does not release property owners from their
payment obligations.
3.32.010.5 All delinquent assessment payments will be required to include any late fees,
legal fees and/or administrative charges allowed to be collected under California State law.
3.32.010.6 In cases where assessments are collected on the Nevada or Placer County tax
bills and where the Counties reimburse the District for 100% of the amount assessed,
District staff may send collection and demand letters on delinquent assessments but will
not proceed to the foreclosure process. The foreclosure process will be processed by
Nevada and Placer Counties pursuant to County and California State law.
3.32.020.1 Standby Charges Annually, the Board of Directors will authorize by resolution
the continuance of and the amount of charges for electric and water standby charges.
Thereafter, the General Manager shall direct staff to prepare an updated list of unimproved
parcels to be assessed electric and water standby charges. The records shall be prepared
in a format acceptable to both Nevada and Placer Counties and shall be submitted to them
before their scheduled deadline. The assessments will then appear on the annual property
tax bills sent out by Nevada and Placer Counties. Nevada and Placer Counties will then act
as the collection agents for the assessments and will forward payment to the District
pursuant to county policy.
Res. 2010-09 (6/2/10), Res. 2011-02 (4/6/11)
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