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Attachment A

nutes* (Attac

or the QuarteC) the Quarter E

ment E)

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rt* or the QuarteF) the Quarter E

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Meeting

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mber 31,

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Presenter John Unger John Unger Curt Jones

Curt Jones

John Unger John Unger

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Attachment A

Welcome and Call to Order

2013-2014 Finance Committee

John Ungersma MDPresidentNorthern Inyo County Local Hospital District

Text6:Bishop, CA 93514Text8:(760) 873-6034 Fax:(760) 873-6034jungersma14@gmail.com

590 Rocking K Road

Text58:CHAIR

Samuel (Mike) McCreary PhDDirectorJohn C. Fremont Healthcare District

Text6:Mariposa, CA 95338Text8:(209) 966-3631 Fax:(209) 966-3776smccrear@sti.net

PO Box 2359

Text58:

Susan Burden Chief Executive OfficerBeach Cities Health District

Text6:Redondo Beach, CA 90277Text8:(310) 374-3426 Fax:(310) 376-4738susan.burden@bchd.org

514 North Prospect Avenue, 3rd Floor

Text58:

Ted Kleiter ChairPalomar Health

Text6:San Marcos, CA 92069Text8:(760) 233-2172 Fax:(760) 839-1531kleiterted@gmail.com

1401-320 El Norte Pkwy

Text58:

Larry Pistoresi Sr.TreasurerChowchilla Memorial Healthcare District

Text6:Chowchilla, CA 93610Text8:(559) 665-3206 Fax:(559) 665-2871lar.vel@thegrid.net

420 Ventura Avenue

Text58:

Robert Hemker Chief Financial OfficerPalomar Health

Text6:Escondido, CA 92025Text8:(760) 740-6385 Fax:bob.hemker@palomarhealth.org

456 E. Grand Avenue

Text58:

Kathleen Kane Secretary/TreasurerSequoia Healthcare District

Text6:Redwood Shores, CA 94065Text8:(650) 592-9800 Fax:(650) 590-9801kmklas@comcast.net

524 Shorebird Circle, #15201

Text58:IMMEDIATE PAST CHAIR

Don Parazo MDTreasurerAntelope Valley Healthcare District

Text6:Lancaster, CA 93534Text8:(661) 945-5894 Fax:(661) 951-3350dparazo@hdmg.net

43839 15th Street W

Text58:EX-OFFICIO

2013-2014 Finance Committee

Thursday, December 19, 2013 Page 1

2013-2014 Finance Committee

Curt Jones CFOACHD | ALPHA Fund

Text6:Roseville, CA 95661Text8:(916) 266-5250 Fax:(916) 266-0314curt.jones@alphafund.org

PO Box 619084

Text58:STAFF CONTACT

2013-2014 Finance Committee

Thursday, December 19, 2013 Page 2

Attachment B

Approval of Prior Meeting

Minutes

 

 

ACHD FTuesdayVia Conf

PRESENRobert H

STAFF:

MOTIO

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Dave McGh

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VAL OF PRoved and sec

FINANCIALoved and sec

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Items

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ACHD FinanCurt Jones up

013. For theilling and coue to San Beejoining the

Total expenseCurt also revi

uarter. All ire in complit was moved

COMMITTr 19, 2013 /

McCreary, Suie Kane and

hee, Tom Pe

RIOR MEEconded to ap

L REPORTconded to ap

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d Call to Orwas called to

Prior Meetd and seconded.

ncial Reporpdated the Ce quarter, theollection of mernardino MAssociation es for the quiewed the invinvestments ance with th

d and second

EE MEETI3:00 pm

usan BurdenDon Parazo

etersen, Curt

ETING MINpprove the m

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rt* ommittee one Associatiomembership

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he ACHD Invded to approv

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n, Ted Kleite

t Jones, Mich

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ACHD financ

ALPHA Fund

00 pm.

s* ve the minut

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dues. Reveommunity Hencial constraavorable by port, reportind in money mvestment Pove the ACHD

er, John Ung

hele Reager

m the October

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d financial re

tes from the

als for the qun increase in

enues were uealth Care D

aints. 8.8% or $22ng an unreal

markets and colicy. D financial r

gersma, Larry

and Leyla T

r 3, 2013 me

Motion carri

eport. Motio

October 3, 2

quarter endedn cash of $53unfavorable bDistrict woul

2,179. lized loss of certificates o

report. Moti

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2013 meeting

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ALPHA FunCurt Jones rep

0, 2013. Fo953,545. Opo the increas300,000, resund. nvestment inealized loss ound Investmt was movedarried.

Reconvene to

Other None.

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ALPHA Fun

ments

nd Financialported on thr the quarterperations proe in claims a

sulted in a fa

ncome was $of $164,000

ment Policy. d and second

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nt was adjourn

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l Report* he ALPHA Fr the Fund reovided $4.6 and claims reavorable vari

$190,271 or 2. All investm

ded to approv

nance Comm

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nance Comm

Fund financiaealized an inmillion in caeserves. Pariance due to

21.6% unfavment portfol

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ended Septevalents of on was attribf 4%, or articipants in

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buted

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Attachment C

ACHD Financial Statements for

the Quarter Ended

December 31, 2013

Assoociationo

Co

ofCaliforn

AndS

onsolidated

FortheQDecem

(Un

niaHealth

Subsidiari

FinancialSt

QuarterEmber31,2

naudited)

hcareDis

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Ended013

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ASSOCIATION OF CALIFORNIA HEALTHCARE DISTRICTS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS FOR THE QUARTER ENDED December 31, 2013 OVERVIEW The Association (ACHD) is a non-profit corporation, established in 1951, to provide Trustee Education and Legislative Advocacy for the Healthcare Districts in the State of California. The Association’s operating revenues come from member dues, (61%) and a management fee (39%) from the ALPHA Fund, a self-insurance pool formed to provide a cost effective solution for workers’ compensation coverage. LIQUIDITY AND CAPITAL RESOURCES For the quarter ended December 31, 2013, ACHD had a decrease in cash of $106,753 due to operations. Most of the Member Fees are collected in the first quarter of the fiscal year with the remaining quarters using the funds for various programs. The Association’s solvency ratios decreased compared to the same period last year. The quick ratio ((Cash + Investments + AR)/Current Liabilities) has increased 4.4% from 18.9 to 19.7 while working capital increased 11% compared to the same period last year. This increase reflects the collection of 97% of Member fees. Both ratios remain very strong and ACHD’s capital resources are sufficient to fund operations for the next twelve months. Net Assets decreased by $179,098 for the quarter but have increased $202,633 compared to the prior year.

FINANCIAL HIGHLIGHTS

Results of Operations Revenues Revenues were comparable to budget. The unfavorable variance of $1,331 was within 1% of budget.

H:\Finance\COMMON\Meetings\FY2014\Finance\2d_QTR_14\ACHD\12_31_2013.docx 2

ASSOCIATION OF CALIFORNIA HEALTHCARE DISTRICTS, INC. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS FOR THE QUARTER ENDED December 31, 2013 (continued) Expenses Total Expenses were favorable to the budget for the quarter by 3.1%, or $9,777.

Personnel cost – were unfavorable $20,029. This was due to the payment of merit increases, retro pay, and bonuses. Year to date expense is comparable to budget -2.5%.

Communication and Education- expense was comparable to budget.

Meeting expenses – were favorable $20,599. This is a timing variance with year-to-date expenses only $6,651 favorable to budget.

Legal fees – expense was comparable to budget.

The Change in Net Assets was a decrease of $179,098. This was expected and was favorable to budget $8,446.

H:\Finance\COMMON\Meetings\FY2014\Finance\2d_QTR_14\ACHD\12_31_2013.docx 3

ASSOCIATION OF CALIFORNIA HEALTHCARE DISTRICTS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of the Period Ended(Unaudited)

December 2013 December 2012 September 2013

ASSETS

CURRENT ASSETS: Cash and equivalents $549,992.18 $151,822.40 $656,745.67 Investments 1,647,856.93 1,733,503.85 1,646,304.41 Accounts receivable 21,523.86 147,574.78 387,171.53 Prepaid expenses 75,305.18 40,899.80 9,100.85

Total current assets 2,294,678.15 2,073,800.83 2,699,322.46

NONCURRENT ASSETS: Property, plant and equipment - net 11,876.48 25,200.91 13,372.40 Other assets 2,352.50 2,352.50 2,352.50

Total noncurrent assets 14,228.98 27,553.41 15,724.90

TOTAL ASSETS $2,308,907.13 $2,101,354.24 $2,715,047.36

LIABILITES AND NET ASSETS

CURRENT LIABILITIES: Accounts payable and accrued liability $112,530.58 $107,610.56 $92,073.07 Deferred revenue 0.00 0.00 247,500.00

Total current liabilities 112,530.58 107,610.56 339,573.07

TOTAL LIABILITIES 112,530.58 107,610.56 339,573.07

NET ASSETS 2,196,376.55 1,993,743.68 2,375,474.29

TOTAL NET ASSETS 2,196,376.55 1,993,743.68 2,375,474.29

TOTAL LIABILITIES AND NET ASSETS $2,308,907.13 $2,101,354.24 $2,715,047.36

01/15/14 4 ACHD BAL SHEET

05:16 PM Balance Sheet After the Elimination ACHD & HAC Consolidated F/S

ASSOCIATION OF CALIFORNIA HEALTHCARE DISTRICTS, INC.AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS For the Quarter and Year to Date Ended December 31, 2013

(Unaudited)

QUARTER Y-T-D

CASH FLOWS FROM OPERATING ACTIVITIES: Change in net assets ($179,097.74) $509,503.26 Adjustments to reconcile change in net assets to net cash provided (used) by operating activities: Changes in fair value of investments (1,552.52) (2,933.89) Depreciation and amortization 1,495.92 3,018.73 Changes in operating assets and liabilities: Accounts receivable 362,921.46 (18,981.00) Interest receivable 2,726.21 682.54 Notes & other receivable 0.00 510.34 Prepaid expenses (66,204.33) (70,300.75) Accounts payable 23,382.04 (43,848.46) Deferred revenue (247,500.00) (70,000.00) Wages payable (2,924.53) (3,365.85)

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (106,753.49) 304,284.92

CASH FLOWS FROM INVESTING ACTIVITIES: Sale (Purchase) of investments 0.00 120,000.00

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 0.00 120,000.00

NET INCREASE (DECREASE) IN CASH (106,753.49) 424,284.92

Cash and equivalents, beginning of period 656,745.67 125,707.26

CASH AND EQUIVALENTS, END OF PERIOD $549,992.18 $549,992.18

01/15/14 5 ACHD CASHFLOW

05:12 PM CONSOLIDATED CASH FLOW ACHD

ASSOCIATION OF CALIFORNIA HEALTHCARE DISTRICTS, INC.STATEMENTS OF ACTIVITIES

Comparison to Budget and Prior Year For the Quarter and YTD Ended December 31, 2013

(Unaudited)

Current Quarter Year to Date Prior Year

Actual Budget Variance (U)/F Actual Budget Variance (U)/F Actual

REVENUES

Management fee - ALPHA $125,000.00 $125,000.00 $0.00 0.00% $250,000.00 $250,000.00 $0.00 0.00% $437,625.77Investment and interest income 2,778.41 2,400.00 378.41 15.77% 5,692.72 4,800.00 892.72 18.60% 3,525.85Unrealized gain/(loss) 1,552.52 0.00 1,552.52 0.00% 2,933.89 0.00 2,933.89 0.00% (2,328.15)Other income 192.18 954.00 (761.82) -79.86% 741.70 954.00 (212.30) -22.25% 15,835.00Gain (Loss) on subsidiaries 0.26 0.00 0.26 0.00% 0.38 0.00 0.38 0.00% 0.00Realized gain/(loss) 0.00 0.00 0.00 0.00% (329.77) 0.00 (329.77) 0.00% 0.00Member fees (2,500.00) 0.00 (2,500.00) 0.00% 787,500.00 800,000.00 (12,500.00) -1.56% 777,000.00

TOTAL REVENUES 127,023.37 128,354.00 (1,330.63) -1.04% 1,046,538.92 1,055,754.00 (9,215.08) -0.87% 1,231,658.47

EXPENSES

Personnel Cost Wages and salaries 147,430.69 126,020.00 (21,410.69) -16.99% 263,746.58 252,164.00 (11,582.58) -4.59% 272,067.37 Payroll taxes and benefits 28,861.27 30,243.00 1,381.73 4.57% 57,022.55 60,842.00 3,819.45 6.28% 66,933.52 Recruiting fees 0.00 0.00 0.00 0.00% 0.00 0.00 0.00 0.00% 154.25

Total personnel cost 176,291.96 156,263.00 (20,028.96) -12.82% 320,769.13 313,006.00 (7,763.13) -2.48% 339,155.14

Other Expenses Meeting expenses 52,401.06 73,000.00 20,598.94 28.22% 68,349.49 75,000.00 6,650.51 8.87% 68,027.01 Communications & Education 40,038.74 38,360.00 (1,678.74) -4.38% 75,520.87 85,420.00 9,899.13 11.59% 8,820.57 Consultants 9,468.00 5,000.00 (4,468.00) -89.36% 12,504.00 12,000.00 (504.00) -4.20% 14,328.54 Outside services 9,421.50 11,044.00 1,622.50 14.69% 17,296.98 16,994.00 (302.98) -1.78% 12,842.39 Maintenance and building 7,836.87 9,900.00 2,063.13 20.84% 16,044.05 19,800.00 3,755.95 18.97% 40,941.62 General operations 4,188.99 10,200.00 6,011.01 58.93% 10,930.94 16,150.00 5,219.06 32.32% 17,260.30 Travel 3,220.07 6,860.00 3,639.93 53.06% 6,100.47 11,300.00 5,199.53 46.01% 20,630.38 Amortization and depreciation 1,495.92 2,020.00 524.08 25.94% 3,018.73 4,820.00 1,801.27 37.37% 12,848.20 Insurance 1,290.00 1,251.00 (39.00) -3.12% 2,815.50 2,502.00 (313.50) -12.53% 11,114.98 Legal fees 468.00 2,000.00 1,532.00 76.60% 3,685.50 12,000.00 8,314.50 69.29% 12,825.50 Annual meeting 0.00 0.00 0.00 0.00% 0.00 0.00 0.00 0.00% 384.22

Total other expenses 129,829.15 159,635.00 29,805.85 18.67% 216,266.53 255,986.00 39,719.47 15.52% 220,023.71

TOTAL EXPENSES 306,121.11 315,898.00 9,776.89 3.09% 537,035.66 568,992.00 31,956.34 5.62% 559,178.85

CHANGE IN NET ASSETS ($179,097.74) ($187,544.00) $8,446.26 4.50% $509,503.26 $486,762.00 $22,741.26 4.67% $672,479.62

01/16/14 6 ACHD BC QTR10:35 AM ACHD Profit & Loss ACTUAL VS BUDGET COMPARISON ACHD

Summary of All Units ACHD- BUDGET VS ACTUAL COMPARISON QTR

Attachment D

ACHD Investment Report for

the Quarter Ended

December 31, 2013

AssoociationoofCaliforn

INVESTM

FortheQDecem

niaHealth

MENTREP

QuarterEmber31,2

hcareDis

PORT

Ended013

stricts,Incc.

1/16/20145:00 PM H:\Finance\COMMON\Meetings\FY2014\Finance\2d_QTR_14\ACHD\ACHD Graphs

Certificate of Deposit & Money market Maturity Par value Cost Market Unrealized G/(L)

10/15/13 BEAL BANK 07/23/14 240,000.00 240,000.00 239,676.00 (324) 10/15/12 DISCOVER BANK 10/24/14 95,000.00 95,000.00 95,254.60 255 10/15/12 GOLDMAN SACHS 10/24/14 240,000.00 240,000.00 240,242.40 242 10/15/12 SALLIE MAE BK 10/24/14 240,000.00 240,000.00 240,643.20 643 04/01/13 BANK OF CHINA 04/10/15 157,000.00 157,000.00 156,715.83 (284) 11/30/12 Comenity Bank DE 12/07/15 200,000.00 200,000.00 198,450.00 (1,550) 04/01/13 DISCOVER BANK 04/11/16 145,000.00 145,000.00 144,348.95 (651) 04/01/13 ALLY BANK UT US 04/11/16 240,000.00 240,000.00 238,015.20 (1,985) 04/16/13 AMERICAN EXPRESS 04/25/16 95,000.00 95,000.00 94,510.75 (489)

Total Investments 1,652,000 1,652,000 1,647,857 (4,143)

Compliance for reporting period 12/31/2013

*** 100% of the Associations' investments are invested in Money market and Certificate of deposit.

*** These investments are in compliance with ACHD's investment policy and there are no exceptions to the California Code.

*** Average investment maturity is 320 days.

ASSOCIATION OF CALIFORNIA HEALTHCARE DISCTRICTS, INC.December 31, 2013

Cost, $1,652

Market, $1,648

1,630

1,645

1,660

Cost

Tho

usan

ds

ACHD Investments

Cost Market

Attachment E

2014 Forecast

Actual+Budget FY 2014 VarianceForecast Budget O/(U)

REVENUES

Management fee - ALPHA $500,000 $500,000Member fees 787,500 800,000 Annual meeting 90,000 90,000 Investment and interest income 10,892 10,000 Other income 13,742 18,954 Realized gain/(loss) ( 330 ) Unrealized gain/(loss) 2,934 Gain (Loss) on subsidiaries -

----------------------- -------------------TOTAL REVENUES 1,404,738$ 1,418,954$ ( 14,216 )$

EXPENSES

Personnel Cost Wages and salaries 508,846 504,204 Payroll taxes and benefits 114,623 129,356 Recruiting fees -

----------------------- -------------------Total personnel cost 623,469 633,560 ( 10,091 )$

Other Expenses Annual meeting 200,000 200,000 Consultants 35,504 35,000 Meeting expenses 166,450 200,000 Maintenance and building 31,044 39,600 Legal fees 14,186 25,000 Communications & Education 165,101 175,000 Outside services 40,198 39,894 General operations 27,679 32,900 Amortization and depreciation 6,201 8,000 Travel 19,800 25,000 Insurance 5,818 5,000

----------------------- -------------------Total other expenses 711,981 785,394 ( 73,413 )$

----------------------- -------------------------------------TOTAL EXPENSES 1,335,450$ 1,418,954$ ( 83,504 )$

CHANGE IN NET ASSETS $69,288 $0 $69,288============== =======================

ACHDFORECAST

For the Six Months Ending December 31, 2013

Attachment F

ALPHA Fund Financial Report

for Quarter Ended

December 31, 2013

2/4/2014 H:\Finance\COMMON\Meetings\FY2014\Quarterly\Q2_2014\ALPHA\Financial Report Highlights_12.31.13 1

FY 2014 FY 2013 Change

Operating Revenues 10,642,020$ 8,375,251$ 2,266,769$ Covered Payroll for 2nd QTR FY 2014 506,102,465$

Operating Expenses 10,131,997$ 8,457,882$ 1,674,115$ (Includes deductible) FY 2013 340,898,303 Increase 48.5% 165,204,162$

Operating Income 510,023$ (82,631)$ 592,654$

Participants Contribution - x deductibles 8,429,692$ 6,951,325$ 1,478,367$

Blended Rate ex deductible 2.42$ 2.25$ -8%

Blended Rate w/ deductible 1.94$ 2.09$ 7%

Claims & Claims Expense ex deductible 7,002,844 5,977,067 (1,025,777)

Less: Actual Claims Paid 6,035,227 4,491,869 1,543,358 Reinsurance Recoveries 207,709 342,981 (135,272) Excess Cash for Investments 1,175,326$ 1,828,179$ (652,853)$

FY 2014 FY 2013 FY 2004

Investment income 976,500$ 1,194,296$ 230,177$

Administrative Cost 762,530$ 710,695$ 346,999$

Investments Portfolio @ FMV+AI 104,566,878$ 96,844,726$ 24,290,824$

Investment growth 4.30 Times in 10 yearsPortfolio have increased by 8% from same quarter last year.Current investment income covers 100% of general and administrative and Loss prevention cost.

FINANCIAL REPORT HIGHLIGHTSSecond Quarter Ended December 31, 2013

INCOME STATEMENTS

(Unaudited)

Growth in Fund's Covered Payroll

(Includes 6 months of deductible adjustment)

Claims and claim expenses 69%

Claims administration 7%

Excess Insurance 3%

ACHD management fees 1%

Participants Services 2% General & Administration

8% TPA expense

10%

Where your dollar goes!!

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

FY 2014FY 2013FY 2004

Thou

sand

s

Where your investment income is used

Administrative Cost

Investment income

-

1

2

3

4

5

6

7FY 2014 FY 2013

Mill

ions

Claims & Reinsurance Recoveries Less: Actual Claims Paid Excess Cash for Investments Reinsurance Recoveries

ALPHA Fund A Joint Powers Authority

Financial Statements

For the Quarter ended December 31, 2013

(Unaudited)

1

ALPHA FUND MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE QUARTER ENDED December 31, 2013

OVERVIEW

ALPHA Fund was formed in 1976 through a Joint Powers Agreement to provide a cost effective solution for workers’ compensation through a self-insurance pool formed by Healthcare Districts in the State of California. In 2002, Assembly Bill 2078 granted ALPHA Fund the right to add non-profit healthcare facilities to the pool. The JPA was last amended in June 2007.

LIQUIDITY AND CAPITAL RESOURCES

For the quarter ended December 31, 2013, ALPHA Fund had a decrease in cash and equivalents of $1.2 million. Increases in cash from Operating Activities ($2.5 million) were more than offset by the purchase of $3.8 million of investments.

QUARTER ENDED DEC 30: FY 2014 FY 2013 FY 2012 FY 2011 FY 2010

UBS FINANCIAL SERVICES

Corporate & Government Bonds $31,290,391 $30,636,593 $29,306,084 $26,410,074 $27,318,356Bond premium & discount - net 796,391 1,001,593 391,435 33,320 33,897 Valuation Reserve 565,351 926,800 283,737 41,637 (648,048)

WELLS CAPITAL MANAGEMENT

Corporate & Government Bonds 46,610,845 43,163,783 38,594,348 36,818,804 33,696,452

Bond premium & discount - net 699,585 478,962 50,959 256,069 307,511

Valuation Reserve 121,175 2,461,852 2,040,404 969,724 (156,500)

MORGAN STANLEYCorporate & Government Bonds 22,540,034 15,265,434 11,880,863 11,151,475 8,437,888 Bond premium & discount - net 699,585 478,962 50,959 256,069 307,511 Valuation Reserve (731,298) 571,007 22,048 26,043 (155,185)

PORTFOLIO TOTAL 100,396,498$ 93,025,469$ 82,127,484$ 75,417,757$ 68,492,963$

Investments (Ex cash)

2

ALPHA FundBALANCE SHEETS

As of the Period Ended(Unaudited)

December 2013 December 2012 September 2013

ASSETS

CURRENT ASSETS Cash and equivalents $2,472,833.95 $2,471,648.74 $3,627,530.75 Accounts receivable 594,779.49 681,819.70 595,697.74 Accrued interest receivable 919,584.23 839,794.46 733,014.19 Prepaid expenses 502,427.65 460,438.27 484,199.15 Investments 100,396,498.21 93,025,468.95 97,334,842.05

TOTAL CURRENT ASSETS 104,886,123.53 97,479,170.12 102,775,283.88

NONCURRENT ASSETS Capital assets, net 3,730,549.26 3,854,152.44 3,784,216.97

TOTAL NONCURRENT ASSETS 3,730,549.26 3,854,152.44 3,784,216.97

TOTAL ASSETS $108,616,672.79 $101,333,322.56 $106,559,500.85

LIABILITIES AND NET POSITION

CURRENT LIABILITIES Accounts payable and accrued liabilities $1,189,450.73 $1,333,241.36 $1,292,374.79 Fully insured deposit 1,073,010.00 319,215.25 1,233,668.70 Line of credit 339,377.05 166,931.52 0.00

TOTAL CURRENT LIABILITIES 2,601,837.78 1,819,388.13 2,526,043.49

NONCURRENT LIABILITIES Deductible deposit 575,000.00 325,000.00 1,037,500.00 Dividends payable to Participants 1,000,000.00 1,750,000.00 1,000,000.00 Reserve for claims and claim expenses 88,748,354.38 79,896,650.46 85,920,927.53

TOTAL NONCURRENT LIABILITIES 90,323,354.38 81,971,650.46 87,958,427.53

TOTAL LIABILITIES 92,925,192.16 83,791,038.59 90,484,471.02

NET POSITION Net investment in capital assets 3,730,549.26 3,854,152.44 3,784,216.97 Unrestricted 11,960,931.37 13,688,131.53 12,290,812.86

TOTAL NET POSITION 15,691,480.63 17,542,283.97 16,075,029.83

TOTAL LIABILITIES AND NET POSITION $108,616,672.79 $101,333,322.56 $106,559,500.85

01/30/14 6 ALPHA BAL SHEET

02:16 PM ALPHA BALANCE SHEET

ALPHA FundSTATEMENT OF CASH FLOWS

For the Quarter and Year to Date EndedDecember 31, 2013

(Unaudited)

QUARTER Y-T-D

CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) from operations $510,023 $1,102,565 Adjustments to reconcile change in net assets provided (used) by operating activities: Depreciation and amortization 63,349 126,315 Changes in operating assets and liabilities: Accounts receivable from participants 184,226 (28,956) Accounts receivable from former participants (57,674) (57,674) Reinsurance and other receivables (125,633) 58,609 Fully Insured deposit (160,659) 364,552 Accounts payable 63,612 (324,085) Wages and employee benefits payable (166,536) 29,359 Interest receivable (186,570) (27,107) Prepaid expenses (18,229) (304,774) Deductible deposit (462,500) 175,000 Claims and claims reserve 2,827,427 5,942,354

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 2,470,836 7,056,158

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of capital assets (9,681) (55,135) Sale (purchase) of investments (3,814,375) (6,862,847) Change in fair value of investments (140,853) (271,760)

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (3,964,910) (7,189,742)

CASH FLOWS FROM FINANCING ACTIVITIES: Line of credit 339,377 (67,568)

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 339,377 (67,568)

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (1,154,697) (201,152)

Cash and equivalents, beginning of period 3,627,531 2,673,986

CASH AND EQUIVALENTS, END OF PERIOD $2,472,834 $2,472,834

01/30/14 7 ALPHA CASHFLOW

02:42 PM CASH FLOW ALPHA

ALPHA FundStatements of Revenues, Expenses and Changes in Net Position

Actual vs BudgetFor the Quarter and YTD Ended December 31, 2013

(Unaudited)

Current Quarter Year to Date YTDActual Budget Variance (U)/F Actual Budget Variance (U)/F Prior Year

OPERATING REVENUES

Participants contributions $8,429,692 $8,274,006 $155,686 1.88% $17,370,278 $16,548,012 $822,266 4.97% $13,756,455TPA revenue 1,230,724 494,319 736,405 148.97% 1,351,290 989,638 361,652 36.54% 426,307Investment income 976,500 878,508 97,992 11.15% 1,664,737 1,757,016 (92,279) -5.25% 2,234,446Other income 5,104 11,600 (6,496) -56.00% 101,251 19,063 82,188 431.14% 46,401

Total operating revenues 10,642,020 9,658,433 983,587 10.18% 20,487,555 19,313,729 1,173,826 6.08% 16,463,609

OPERATING EXPENSES

ACHD management fee 125,000 125,000 0 0.00% 250,000 250,000 0 0.00% 437,626

Claims and claim expenses (net of recoveries) 7,002,844 6,644,937 (357,907) -5.39% 14,050,194 13,289,874 (760,320) -5.72% 11,716,023Claims processing expenses 754,627 970,536 215,910 22.25% 1,262,861 1,582,676 319,815 20.21% 1,181,826Excess insurance expense 256,556 522,672 266,116 50.91% 676,391 1,045,344 368,953 35.29% 739,645General and administrative expenses 762,530 827,861 65,331 7.89% 1,514,004 1,628,376 114,372 7.02% 1,364,792TPA expense 978,633 350,541 (628,092) -179.18% 1,137,961 701,334 (436,627) -62.26% 406,174Participants services 251,807 324,892 73,085 22.50% 493,579 634,422 140,843 22.20% 352,057

Total operating expenses 10,131,997 9,766,439 (365,558) -3.74% 19,384,990 19,132,026 (252,964) -1.32% 16,198,143

NET INCOME/(LOSS) FROM OPERATIONS 510,023 (108,006) 618,029 572.22% 1,102,565 181,703 920,862 506.80% 265,466

NONOPERATING REVENUES (EXPENSES)

Amortization of bonds premium and discount (140,853) 0 (140,853) 0.00% (271,760) 0 (271,760) 0.00% (26,856)Net increase (decrease) in fair value of investments (752,719) 0 (752,719) 0.00% (733,626) 0 (733,626) 0.00% 509,857

Total non-operating revenues/(expenses) (893,572) 0 (893,572) 0.00% (1,005,387) 0 (1,005,387) 0.00% 483,000

CHANGE IN NET ASSETS ($383,549) ($108,006) ($275,543) -255.12% $97,179 $181,703 ($84,524) -46.52% $748,466

Net assets at beginning of the quarter/year 16,075,030 15,594,302 16,793,817

NET ASSETS AT END OF QUARTER/YEAR $15,691,481 $15,691,481 $17,542,284

02/05/14 8 ALPHA BC QTR

05:05 PM ACTUAL VS BUDGET COMPARISON ALPHA

Attachment G

ALPHA Fund Investment

Report for Quarter Ended

December 31, 2013

2/3/2014 H:\Finance\COMMON\Meetings\FY2014\Quarterly\Q2_2014\ALPHA\INVESTMENTS_DASHBOARD_12.31.13 Dashboard

Investment Overview:Cash 536,018$

MMFund 2,714,778$

Fixed Income 101,316,082$

Market value + accrued 104,566,878$

Duration 4.108 Years

Avg Credit Rating AA-/Aa3/AA-

Performance versus Index 1 YEAR 2 YEARS 3 YEARS

Total Return -2.04% 2.33% 4.15%

Barclays Government/CBF -2.36% 1.17% 3.63%

Book Return 3.13% 4.66% 4.86%

Note: Percentages are trailing 12 months net of fees

Notes: Dell, Inc. went private in Oct 2013 and was down graded by credit agencies to non-investment grade. It represents a total $810K or .8% of the total portfolio.

ALPHA FundINVESTMENT HIGHLIGHTS

For Quarter Ending December 31, 2013Investment Objectives: Preservation of Capital, Maximizing returns and Diversification.

28%

21% 22%

12%

14% 3%

Security Type

Corporate Notes

Municipal bonds

U.S. Treasury Notes

U.S. Agency securities

Mortgage-backed securities

Certificate of Deposit

2014 2013 2011 $-

$20

$40

$60

$80

$100

$120

Millions Investment Growth

LT Investments Cash

-

5

10

15

20

Agency Certificate of Deposit Corporate Mortgage Backed Municipal US Treasury

Millions

INVESTMENT DURATION

Less than 1

1 to 5

6 to 10

More than 10

Duration

Agency type

Sum of Market Value

Account

-

5

10

15

20

25

Agency Certificate ofDeposit

Corporate Mortgage Backed Municipal US TreasuryMillions

INVESTMENT RATINGS

AAA A BBB NA Non-invest Grade

Credit Ratings

Agency type

Sum of Market Value

Account

2/4/20149:37 AM H:\Finance\COMMON\Meetings\FY2014\Quarterly\Q2_2014\ALPHA\Investment report 12.31.13

ALPHA Fund - Total Return

Barclays Government/CBF

ALPHA Fund - Book Return

INVESTMENT BY PORTFOLIO

At Par At cost *At Market % of PortfolioMorgan Stanley MS 22,273,870$ 23,138,562$ 22,408,495$ 21%UBS Financial Services UBS 30,596,583$ 32,030,732$ 32,391,662$ 31%Wells Capital Management WCM 48,837,139$ 49,277,172$ 49,766,722$ 48%

Total 101,707,591$ 104,446,466$ 104,566,878$ 100%

*At Market includes investment cash and accrued interest of $4,170,380

1 Year1/1/2013

12/31/2013

2 Years1/1/2012

12/31/2013

3.13%

2.33%

1.17%

ALPHA FundINVESTMENT REPORT

December 31, 2013

4.66%

4.15%

3.63%

4.86%

Performance Summary (Annualized)3 Years

1/1/201112/31/2013

-2.04%

-2.36%

-

5

10

15

20

25

30

Corporate Municipal US Treasury Agency CMO Mortgage Backed Certificate ofDeposit

Cash

Millions Investment By Type

Market Value + AI Market Value Original Cost

$- $10

$20 $30

$40 $50Millions

Investment by Portfolio *At Market At cost

2/4/20149:37 AM H:\Finance\COMMON\Meetings\FY2014\Quarterly\Q2_2014\ALPHA\Investment report 12.31.13

INVESTMENT BY TYPE

Investment Types Original Cost Accrued Interest Unrealized G/(L) Market Value FMV+AI

Agency 34,970,602.05 227,500.20 (529,556.26) 34,392,559.12 34,620,059.32

Corporate 27,961,799.63 320,458.30 349,679.96 28,137,949.40 28,458,407.69

Municipal 21,081,640.20 319,693.59 283,863.03 20,804,698.75 21,124,392.34

Mortgage Backed 14,498,778.84 46,524.61 (156,309.45) 14,372,728.32 14,419,252.93

Money Market 3,250,795.99 - - 3,250,795.99 3,250,795.99

Certificate of Deposit 2,682,849.35 5,407.54 7,551.07 2,688,562.30 2,693,969.84

Grand Total 104,446,466$ 919,584$ (44,772)$ 103,647,294$ 104,566,878$

INVESTMENT DURATION

Sum of Market Value

Investment Types Less than 1 1 to 5 6 to 10 More than 10 Grand Total

Agency 7,707,635 24,294,085 2,390,839 34,392,559

Certificate of Deposit 726,742 1,961,820 2,688,562

Corporate 300,240 9,726,270 17,422,976 688,463 28,137,949

Mortgage Backed 19,736 2,426,411 11,926,582 14,372,728

Municipal - 17,593,372 3,211,327 20,804,699

Grand Total 1,026,982$ 37,008,833$ 47,354,800$ 15,005,883$ 100,396,498$ Note: Total excludes cash and accrued interest.

NON-INVESTMENT GRADEAt Par At cost *At Market Maturity % of Portfolio

Dell Inc 250,000 255,348 252,187.50 04/01/2016 0.25%Dell Inc 300,000 316,470 306,375.00 04/15/2018 0.32%Dell Inc 250,000 268,750 251,875.00 06/15/2019 0.27% Total 800,000 840,568 810,438 0.84%

SummaryCompliance as of 12/31/2013

the Board has granted this authority by reaffirming the investment policy each year.*** Average investment duration is 4.1 years.

Definitions:

Book return - measures income return in relation to the amortized cost of the portfolio.

Reference:Book, total and Index returns are collected from Clearwater performance report.

*** Approximately 18% of the investments (Corporate Bonds) exceed Section 53601 of the Government Code limiting maturity to five years; however,

Total Return -or market return, is the portfolio return that includes both price changes as well as income return in relation to the market value of the portfolio.

*** Non- investment Grade -Dell Inc. went private in October 2013 and was downgraded by credit agencies to non-investment grade.***Investments that have been downgraded to non investment grade represent .8% of the portfolios and have been presented to you for review.

$-

$5

$10

$15

$20

Agency Certificate ofDeposit

Corporate Mortgage Backed Municipal

Millions Duration

Less than 1

1 to 5

6 to 10

More than 10

Attachment H

2014 Forecast

2/4/2014 H:\Finance\COMMON\Meetings\FY2014\Quarterly\Q2_2014\ALPHA\ALPHA_2014_Forecast

ALPHA Fund2014 Forecast

FY 2014 FY 2014 VarianceForecast Budget O/(U)

OPERATING REVENUES

Participants contributions- Fully insured 36,858,840.00 34,272,110.00 2,586,730.00 Participants contributions- Deductible - - - Investment income 3,404,053.00 3,513,676.00 (109,623.00) Realized gain/(loss) on investments (29,318.00) - (29,318.00) TPA revenue 2,941,290.00 1,981,680.00 959,610.00 Other income 134,436.00 52,263.00 82,173.00 Commissions (1,278,606.00) (1,176,086.00) (102,520.00)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TOTAL OPERATING REVENUES 42,030,695.00 38,643,643.00 3,387,052.00

OPERATING EXPENSES

ACHD Sponsorship fees 500,000.00 500,000.00 - -

CLAIMS - #VALUE!Direct Claims- Fully insured 28,427,726.40 26,579,750.00 1,847,976.40 Personnel cost 1,913,963.00 2,233,990.00 (320,027.00) Reinsurance 1,368,356.80 2,090,691.00 (722,334.20) Other operating expenses 698,900.00 605,382.00 93,518.00

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total Claims 32,408,946.20 31,509,813.00 899,133.20

- LOSS PREVENTIONPersonnel cost 650,408.00 800,724.00 (150,316.00) Other operating expenses 267,778.00 294,971.00 (27,193.00) Member services 265,682.00 321,420.00 (55,738.00)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total Loss Prevention 1,183,868.00 1,417,115.00 (233,247.00)

TPAPersonnel cost 581,191.00 381,136.00 200,055.00 Direct Claims- Deductible 511,998.00 - 511,998.00 Reinsurance 453,600.00 Other operating expenses 497,749.00 1,022,987.00 (525,238.00)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total TPA 2,044,538.00 1,404,123.00 186,815.00

ADMINISTRATIONPersonnel cost 2,168,982.00 2,307,395.00 (138,413.00) Depreciation 258,235.00 266,710.00 (8,475.00) Other operating expenses 242,497.00 247,718.00 (5,221.00) Building Maintenance 102,768.00 111,635.00 (8,867.00) Professional fees 144,456.00 159,279.00 (14,823.00) Insurance 103,535.00 130,748.00 (27,213.00) Meeting and travel 67,840.00 83,387.00 (15,547.00) Office Rent - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total administration 3,088,313.00 3,306,872.00 (218,559.00)

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TOTAL OPERATING EXPENSES 39,225,665.20 38,137,923.00 1,087,742.20

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - NET INCOME FROM OPERATIONS 2,805,029.80 505,720.00 2,299,309.80

= = = = = = = = = = = = = = = = = = = = = = = = = =

OTHER CHANGES CHANGES IN FUND BALANCE

Amortization of bonds premium & discount (271,760.00) - Unrealized gain (loss) on investments (733,627.00) - Distribution of surplus - - -

CHANGED IN FUND BALANCE (1,005,387.00) 1,005,387.00

=================== =============== ================== NET INCOME/(LOSS) 1,799,642.80 505,720.00 1,293,922.80

=================== =============== ==================

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