HomeMy WebLinkAboutOctober 1
Finance and Investment Committee Meeting
Town of Los Altos Hills
City Council Chambers
Monday, October 1, 2007
The meeting was called to order at 5:05 p.m. by Chair Jean Mordo.
Members present: Chair Jean Mordo, Wilf Corrigan, Karl Kneip, Jim Lai, Stan Mok, ,Lalla
Stark – arrived 5:15 p.m.
Members absent: Frank Lloyd, Doug Norby,
Staff present: Carl Cahill, Nick Pegueros, Cindy Higby
Others present: Carlos Oblites, Senior Managing Consultant, PFM Asset
Management, LLC
Roddy Sloss – LAH citizen
Approval of minutes: The minutes from the September 10, 2007 meeting were read and
approved.
Review of Town Investments by Carlos Oblites, Senior Managing Consultant, PFM
Asset Management.
Carlos Oblites presented the October 1, 2007 Town of Los Altos Hills Investment Review
covering current market conditions and analysis of the town’s portfolio. The portfolio is in
compliance with the current investment policy, invested in a 1 – 3 year maturity range and
is yielding 4.89% since inception. Jean asked Nick to put together a paper for the council
to modify the current investment policy to allow investment in AAA & AA corporate bonds,
which are allowed under State law. We also agreed to seek approval from Council to
increase the maturity range of our investments to take advantage of the steeper yield
curve. Since this is likely to increase the volatility of returns, the Council should be
comfortable with this fact. Members present were unanimous in supporting these
changes.
Discussion of Health Benefits Package Option and Cafeteria Plan for calendar year
2008
Nick and Carl will put together a proposal for the October 11, 2007 town council meeting to
establish a cafeteria plan for Town employees.
Nick’s notes are below. Members present were unanimous in supporting this course
of action.
Presentations from the floor - none
Adjournment - The meeting adjourned at 6:25 p.m. Next meeting will be Monday,
November 12, 5:00 PM. Please note the change from November 5.
Nick’s Notes on Retiree Medical
Goal
To identify a legal option to reduce the long-term impact of other post employment benefits
(OPEB) referred to as “retiree medical”, on the financial resources of the Town.
Background
Bartel & Associates calculated the Town’s actuarial obligation for retiree medical is
$2.483M
Town’s retiree medical benefit regulated by CA state law (PEMCHA)
o Employees and actives must receive same benefit
o At no time can benefit be less than the PEMCHA minimum ($97 for 2008)
Staff turnover will require new hires in the near future
o 3 vacancies at present
o 5 actives eligible to retire today
o 3 actives eligible to retire in fewer than 5 years
Proposal
Modify the Town’s retiree medical benefit to cap increases to the retiree medical
liability.
Establish a full flex cafeteria plan for 2008
o Active employees - no change in benefits package
Minimum PEMCHA contribution made by employer ($97)
In-lieu of direct payment to PEMCHA, EE will receive flex dollars
consistent with current benefit structure
Cash out option only in accordance with the existing plan
o Exiting retiree - pension checks reduced but made whole by Town
CalPERS will reduce pension check by the difference between $97
and the cost of medical plan selected by retiree
Town will make retiree whole, up to maximum allowance for active
employees
o New retirees after 10/11/07
If employee retires following continuous service to the Town which
included service on 10/11/07, then retiree medical benefit will be equal
to the benefit provided active employees.
If employee retires following any amount of service to the Town and
was not an active employee on 10/11/07, then retiree medical benefits
will equal the PEMCHA minimum.