Finance Committee Meeting Minutes – Wednesday, July 15, 2020

For your consideration, please read the minutes from the Finance Committee Meeting held on Wednesday, July 15, 2020 at 3:00 p.m. in the Commission Meeting Room.

Finance Committee Minutes 7-15-20 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

Wednesday, July 15, 2020 at 3:00 PM 

FINANCE COMMITTEE MINUTES

MEMBERS PRESENT:         

Bob Duncan, Committee Chairman

Donald Elliott, Commissioner

Tripp Stephens, Commissioner (via Microsoft Teams)

Andrew Burroughs, Executive Director (via Microsoft Teams)                                               

ALSO PRESENT:                  

Ben Turnipseed, Commission Chairman

Charles Cook, Commissioner (via Microsoft Teams)

LaDonnah Roberts, Deputy Executive Director

Pamela Crosby, Director of Procurement

Frances Wilson, Senior Accountant

Janice Meridith, Executive Commission Administrator 

MEDIA PRESENT:               

None

Committee Chairman Duncan called the meeting to order at 3:00 PM.  

PUBLIC COMMENT PERIOD

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

APPROVAL

  1. Minutes from the June 17, 2020 Finance Committee Meeting

Commissioner Elliott made a motion seconded by Commissioner Stephens to approve the minutes from the June 17, 2020 Finance Committee Meeting.  Motion carried 3-0-0. 

  1. Surplus Equipment and Inventory – L. Roberts

Mrs. Roberts provided a listing of 10 items consisting of trucks and trailers that the JWSC staff has deemed no longer necessary for our mission.  We are recognizing those items as ones to be surplused and are requesting authorization for their disposal. 

Commissioner Elliott made a motion seconded by Commissioner Stephens to move that the Finance Committee recommend that the full Commission review and approve the above referenced items be declared as surplus and disposed of in a manner most beneficial to the JWSC.

Commissioner Elliott asked if these items are automatically placed on GovDeals for sale.  Mrs. Crosby responded yes.  Commissioner Elliott then asked how that is working for us.  Mrs. Crosby replied that it is working very well; and that at the last meeting some camera equipment was approved as surplus of which we have already sold 2 pieces.  She added for government surplus this is their clearing house; there is one other site that could be used but GovDeals is the best one so far that we have found to use.

Motion carried 3-0-0.

  1. JWSC Pension Addendum – IRS Approval – L. Roberts

Mrs. Roberts advised that JWSC has been notified by the Georgia Municipal Employees Benefit System that we must make application to the IRS for a favorable determination letter.  This is a periodic application that we must make.  The reason for obtaining that letter is important is because it allows the JWSC to deduct contributions that are made to our Defined Benefit Plan, but it allows the participants to defer income taxes on their contributions and to allow their contributions to grow tax deferred until they are distributed from the Plan.  Mrs. Roberts stated that in order to request that determination from the IRS there are certain forms that need to be filled out and submitted, and we are requesting that the Commission Chairman be authorized to execute those necessary forms so that we may submit those for this filing.

Commissioner Elliott made a motion seconded by Commissioner Stephens to move that the Finance Committee recommend to the full Commission that the Brunswick-Glynn County Joint Water and Sewer Commission Chairman be authorized to sign the forms required to facilitate the Internal Revenue Service review necessary to issue a favorable determination letter from the IRS related to the JWSC Defined Benefit Retirement Plan.  Motion carried 3-0-0. 

DISCUSSION

  1. Harrington Warehouse Update – L. Roberts

Mrs. Roberts said that she is pleased to have the opportunity to recognize Mrs. Crosby and her team for the hard work that they have done in implementing the Warehouse Inventory System.  She noted that Mrs. Crosby had provided a timeline for the update.  The physical count of all their rolling stock which is their trucks and their warehouse was completed by June 26th, and they have uploaded that data into the City Works Tracking System as of July 1st.  They have completed construction of office space for the inventory team to reside and this was completed on July 2nd.  They now have staff rotating between the Harrington warehouse and the Academy Creek warehouse, and they have already placed their initial replenishment order; that occurred on July 10th.  In a short period of time they have had a lot of activity, but it has been activity leading up to them being able to do that.  The team has faced a lot of physical work, some technological challenges, but they have had great team coordination and communication.  Mrs. Roberts said she wanted to recognize them for that and for their accomplishment.  She added that they have loaded all of this information into the City Works System and into Innoprise, our financial system, and they have recognized an inventory variance of approximately 9.7% which amounts to $46,672.  That is out of a warehouse value of $479,229.36, which will be recorded in our financial statements.

Mrs. Crosby agreed that the team had a few technical challenges and they are still trying to work through those with our network.  She added that for the most part, we have our feet on the grounds, we are there and the guys have gotten used to us being there.  We have placed the first replenishment order, but we have not run out of anything, and that is good.  We did surplus some items.  All things are off to a good start so far.

Commissioner Duncan asked about the inventory of the rolling stock in vehicles and if those are still accounted for as “in stock” items.  Mrs. Crosby responded that City Works does allow them to manage multiple storerooms, and each truck will be its own storeroom, so when the parts cross the threshold of the physical warehouse itself they will transfer to a truck, and from the truck through the work order process those parts will be used from that inventory.  This allows them to keep rolling stock on the truck which alleviates their having to come back, and for an emergency response they do have some of the basic items they will need on the truck.  Commissioner Duncan then asked if on a truck by truck basis if a similar stocking level is maintained.  Mrs. Crosby replied that for Water Distribution Division trucks they do have some stock that is similar, and she gave an example of one truck that responds to more fire hydrant needs and they have stock for that.  She added that within a few thousand dollars, each truck has about the same value of inventory, and for similar items that each truck has a specific number of basic things they will need.  Each truck carries between about $8,000 and $10,000 of inventory, and with 5 trucks they have about $50,000 of rolling stock that is outside of the walls of the warehouse.  Commissioner Duncan then asked about how security is managed, or managing the inventory on a truck by truck basis.  He commented that we transition from “in the bin” on the truck to where it is now in the ground, and asked what is being done there for checks and balances to maintain the inventory count proper.   Mrs. Crosby said that the trucks will be rotated and come in for a cycle count and compare what the count says compared to what inventory the system says they should have.  This is done through the work order process.  She noted that the one thing that is done different at the Harrington location versus what is already in place at the Academy Creek location is that at Academy Creek the inventory is transferred straight to a work order and staff will create rolling stock at that location next.  There are only 5 trucks at Harrington making it the best place to start the practice of rolling stock, and then do the same at Academy Creek where they have 3 times the number of trucks.  Commissioner Duncan then asked about the period of the cycle counts.  Mrs. Crosby stated that they are looking at once per month, but at this time they will do it every 2 weeks to check for any big issues.  She added that they already informally do cycle counts on a routine basis, for example when it is a rainy day they may come in and count trucks.  She said they have been put on a schedule, which is actually how they load their trucks each week and with 5 trucks a different truck comes in and stocks each day of the week instead of all 5 coming each and every day all at the same time.  Commissioner Elliott then asked who does the count of the trucks, and Mrs. Crosby replied that the truck will come in and the technicians and the truck crew will do the count together.  She added that a listing of the inventory will be printed out for use in checking the inventory of about 70 items on each truck.  Commissioner Duncan commented that directionally he thought this was the way to go and would like to have an update in about 3 months on how the inventory system is working out. 

  1. Financial Statements Month End June 30, 2020 – L. Roberts

Mrs.  Roberts provided that the preliminary year end statements for Fiscal Year 2020 will be reviewed on this financial report for month ending June 30, 2020.  After the audit is done there will be some adjustments made so some numbers will change from what is reviewed on the current report.  Mrs. Roberts provided some highlights of the Financial Statements for the month ending June 30, 2020 for the Finance Committee.  In the Assets section of the Balance Sheet she noted the Bond Sinking Fund was back down to $625K for year-end since the bond payment was made during June.  Accounts Receivable were down from $2.4M on June 30, 2019 to half that at $1.2M on June 30, 2020.  Construction in Progress increased when the 2019 year ended with $8.8M is compared with the 2020 year ending at $13.5M.  In the Liabilities section Mrs. Roberts commented that the Net Pension Liability value was indicated to be at $2,818,580.00 at year end for 2020, and appears to be the same as year ending 2019.  She provided that this Net Pension Liability value for year ending 2020 would be adjusted by the auditors using the numbers reported from the Actuarial.  At this time, the Net Position for year ending 2020 is at $150,922,092.00, which will change due to adjustments to be made during the 2020 audit process. The net position for year ending 2019 finalized at $139,218,404.00, which when compared with the current value for 2020 indicates that JWSC gained in its net position during the Fiscal Year 2020.  Some of the values on the financial reports for Fiscal Year 2020 will be adjusted through journal entries by the external auditors.  The Combined Revenue Statement was then briefly highlighted.  Commissioner Duncan commented that the expenses appear to be low (compared to budget), and asked if this was positive or is it from delaying work.  Mr. Burroughs provided that the sludge hauling costs have gone down about $300,000.00 during 2020, in addition to electrical savings at a few pump stations incurred by improvements in the system.  The Project Report was also briefly reviewed and Mrs. Roberts noted some of the projects with activity, and advised that the completed projects will drop off from this FY2020 report to the next one which will be the first Project Report for Fiscal Year 2021.

Committee Chairman Duncan gave kudos to the team for their hard work dealing with everything that has been going on, and for JWSC landing financially where it needed to be at the end of the fiscal year.  He also thanked Mr. Burroughs and Mrs. Roberts for their leadership and efforts in everything, from the sludge hauling project which was a significant contribution to the operating expense reduction.  Commissioner Duncan also acknowledged Mrs. Crosby starting on the materials management, and that he believes this will really pay dividends as JWSC goes through building that operational discipline at the crew level, not just the warehouse level.  He added that through this project, Mrs. Crosby’s team is paying financial dividends that will benefit every customer in our community.  Also as JWSC becomes more and more disciplined financially as we execute these major Capital Projects that are funded from SPLOST, that also in my view puts a lot of credit your way in confidence from the tax payers that are supporting the SPLOST funding.  Commissioner Duncan thanked everyone for that.

Committee Chairman Duncan asked if there were any other items to discuss.

There being no further business, Chairman Duncan adjourned the meeting at 3:25 p.m.