LMUD board holds public hearing on rate increase

The Lassen Municipal Utility District Board of Directors meets at 5:30 p.m. Tuesday, March 28 at the district office, 65. S. Roop St.

The board will host a public hearing to consider an adjustment to the district’s energy charges for all rate classes.

The board will also consider a series of changes to the name of one its state-held savings accounts — moving an additional $1 million from the “LAIF Unrestricted Savings” account to the “Board Restricted Cash Reserves — LAIF” account. Then the board will consider changing the name of the Board Restricted Cash Reserves — LAIF account to the “Board Restricted Rate Stabilization Fund — LAIF” account.

According to the agenda, the changes are due to “increasing purchased power cost.”

According to the California State Treasurer’s Office, a LAIF account is a Local Agency Investment Fund account that “offers local agencies the opportunity to participate in a major portfolio, which invests hundreds of millions of dollars, using the investment expertise of the State Treasurer’s Office investment staff at no additional cost to the taxpayer.”

So what is an LAIF account?
Here’s the description of an LAIF account from the California State Treasurer’s Office.

The Local Agency Investment Fund, a voluntary program created by statute, began in 1977 as an investment alternative for California’s local governments and special districts and it continues today under Treasurer Fiona Ma’s administration. The enabling legislation for the LAIF is Section 16429.1 et seq. of the California Government Code.

The LAIF is part of the Pooled Money Investment Account. The PMIA began in 1955 and oversight is provided by the Pooled Money Investment Board and an in-house Investment Committee. The PMIB members are the state treasurer, the director of finance and the state controller.

The Local Investment Advisory Board provides oversight for LAIF. The board consists of five members as designated by statute. The state treasurer, as chair, or her designated representative, appoints two members qualified by training and experience in the field of investment or finance, and two members who are treasurers, finance or fiscal officers or business managers employed by any county, city or local district or municipal corporation of this state. The term of each appointment is two years or at the pleasure of the treasurer.

All securities are purchased under the authority of Government Code Section 16430 and 16480.4. The State Treasurer’s Office takes delivery of all securities purchased on a delivery versus payment basis using a third-party custodian. All investments are purchased at market and a market valuation is conducted monthly.

Additionally, the PMIA has policies, goals and objectives for the portfolio to make certain that our goals of safety, liquidity and yield are not jeopardized and that prudent management prevails. These policies are formulated by Investment Division staff and reviewed by both the PMIB and the LIAB on an annual basis.

The State Treasurer’s Office is audited by the Bureau of State Audits on an annual basis and the resulting opinion is posted to the State Treasurer’s Office website following its publication. The Bureau of State Audits also has a continuing audit process throughout the year. All investments and LAIF claims are audited on a daily basis by the State Controller’s Office as well as an internal audit process.

Under federal law, the state of California cannot declare bankruptcy, thereby allowing the Government Code Section 16429.3 to stand. This section states that “moneys placed with the treasurer for deposit in the LAIF by cities, counties, special districts, nonprofit corporations or qualified quasi-governmental agencies shall not be subject to either of the following: (a) transfer or loan pursuant to sections 16310, 16312, or 16313, or (b) impoundment or seizure by any state official or state agency.”

During the 2002 legislative session, California Government Code Section 16429.4 was added to the LAIF’s enabling legislation. This section states that “the right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi-governmental agency to withdraw its deposited moneys from the LAIF, upon demand, may not be altered, impaired, or denied in any way, by any state official or state agency based upon the state’s failure to adopt a state budget by July 1 of each new fiscal year.”

Other items on the agenda
Other items on the agenda include public comment; staff member reports; board member reports; approval of the minutes from the March 2, board meeting; a financial report from the accounting and finance manager; a report from the general manager; a report from the electric operations manager; and a report from the business manager.

The board may adjourn to closed session at any time during the meeting, according to its agenda.

The board’s next regularly scheduled meeting will be held at 5:30 p.m. Tuesday, April 25.