Water Board

ALBANY WATER BOARD - Finance Committee MINUTES OF MEETING August 23, 2024 A Finance Committee meeting of the Albany Water Board was officially convened at 8:35am, in the Conference Room at the Albany Water Board, 10 North Enterprise Drive, Albany, NY on Friday, August 23, 2024 PRESENT: Anthony Owens, Finance Committee Chair; Karen Strong, Committee Member; James R. Frezzell, Committee Member, Charles Houghton, Board Chairperson. EXCUSED: Rachel Johnson, Committee Member; William Simcoe, P.E., Deputy Commissioner. STAFF PRESENT: Joseph Coffey, P.E., Commissioner; Christopher Powers, Director of Fiscal Operations; Linda Hendrick, Senior Accountant; Sarah Terrill, HR Generalist II; Karen Wilkes, Administrative Assistant BOARD ADVISORS PRESENT: Bill Kahn, UHY Advisors; Laura Gulfo, Attorney at Law, MCL&C, PLLC. Approval of Meeting Minutes Committee Chairman Owens introduced the minutes of the Finance Committee meeting held on July 26, 2024. With no objection, the reading of the minutes was dispensed, and Mr. Houghton made a motion to approve the minutes of said meeting, seconded by Ms. Strong, and the minutes were approved unanimously. Financials – Christopher Powers, Director of Fiscal Operations Audit Status Mr. Powers reported that audit field work was completed approximately one week ago, expects to receive a draft audit report and management letter next week and will share with the Board when received. Mr. Powers reported that there were no surprises, prior period adjustments for 2023 were reasonable and that the debt service coverage ratio for 2023 appeared healthy, heavily influenced by the AWD’s ability to capitalize $5M in capital improvement projects. With the addition of senior accountant, Linda Hendrick and their teams’ response to this audit, Mr. Powers reported that the finance team will be better prepared to respond to the next audit. Mr. Powers will provide an update at the next Audit Committee meeting on September 27, 2024. Ms. Strong indicated that she will not be present for the Audit Committee meeting. Mr. Houghton agreed to chair the Audit Committee in her absence. Draft 2025 Budget Mr. Powers presented a draft budget for 2025 with conservative estimates for revenues and incomplete estimates for expenses (included benefits, waiting to receive personnel expenses from the Budget Director. Mr. Powers anticipates AWD’s cash balances are sufficient to support operating expenses for 2025, with a goal to begin accumulating cash in the following year, and strategizing how to include small capital improvement projects into the operating budget in the future, as the AWD had done in prior years. With a projected 10% flat rate increase over 2024, estimated revenues are $42 million, which is the minimum needed to cover existing and planned capital improvement project debt service. Revenues included miscellaneous fees from fishing permits, conservative grants from Department of Environmental Conservation (DEC)/Environmental Facilities Corporation (EFC) of $13 million. Revenues from carbon offset credits and lumber were earmarked for non-operational expenses therefore were not included in the operating budget. Commissioner Coffey added that non-personnel expenses were higher as the 2025 budget included requests from each department head that included deferred requests (e.g., supplies, equipment, instrumentation, contract services). Mr. Coffey noted that salary expenses were lower due to being short two engineering positions, despite their continued recruitment efforts. Mr. Coffey stressed the importance of including small capital improvement projects (e.g., $2-3 million, fluoridation of water) into the operating budget to strengthen the AWD’s ability to provide basic water and sewer service and to determine appropriate future rate increases. While stressing the need for increased revenues (e.g., selling to other municipalities, rate increases, organic growth), Mr. Coffey raised the issue of affordability. Tiered billing has shown some benefit, however, the AWB needs to consider how to mitigate the impact of rate increases on residents who are below the poverty line (e.g., abatement). Mr. Coffey and Mr. Powers have a meeting with the Mayor and the Budget Director, scheduled for Tuesday, August 27, 2024. They anticipate receiving updated personnel expenses and will provide to the Board prior to September’s Board meeting. The next scheduled Finance Committee meeting is Friday, October 25, 2024, 8:30am Being no further business, Chairman Owens called for a motion to adjourn the meeting. A motion was made by Ms. Strong, seconded by Mr. Frezzell, and passed unanimously. The meeting was adjourned at 9:16 am.