HomeMy WebLinkAboutMay 12DRAFT minutes
Finance and Investment Committee Meeting
Town of Los Altos Hills
Town Hall Council Meeting Room
Monday, May 12, 2008
The meeting was called to order at 5:05 p.m. by Chair Roddy Sloss.
Members present: Wilf Corrigan, Karl Kneip (5:55pm arrival), Frank Lloyd,
Stan Mok, Jean Mordo, Roddy Sloss
Members absent: Jim Lai, Doug Norby, Lalla Stark
Staff present: Carl Cahill, Nick Pegueros
Public present: Allan Epstein
Approval of minutes: The minutes from the May 21, 2008 meeting approved as submitted. Frank
Lloyd requested more detail be included in future minutes.
Report by Jean Mordo – recent city council activities of interest:
No significant new spending approved since last FIC meeting; Discussion of Westwind Barn
refurbishment plans and budget.
Report by Nick Pegueros – recent finance department matters
Nothing to report.
Presentation by Nick Pegueros on proposed FY2008-2009 Town Annual budget:
Nick emailed the presentation to the Committee before the meeting and handed out copies in the
meeting (appended to the minutes). Nick presented the material to the Committee. The ensuing
discussion included the following points.
General Fund revenue assumptions included a $100,000 estimated reserve for loss of State sourced
revenue; property tax revenue growth of 3.9% is based on a study which considers the current
economic climate.
General Fund spending assumptions include static headcount with 2.8% cost of living increases plus
$45,000 for merit increases. Headcount related costs total slightly less than 50% of total
expenditures consistent with prior years. Professional service spending is budgeted to increase. A
small increase in the use of outside services is planned. Sheriff’s services are expected to increase
due to cost increases. Overall spending is expected to increase $270,000 including planned
reductions of approximately $100,000 in Committee spending offset by lower overhead
reimbursements from other funds due to a new allocation study, a biennial election and higher
($20,000 non recurring) animal control costs. Retiree medical costs of $245,000 are consistent with
last year and represent approximately $200,000 of past service costs (being amortized over 15
years) and $45,000 of current service costs.
Draft FIC minutes – May 12, 2008 – page 2.
Proposed accounting changes are: 1) Adoption of a new cost allocation methodology based on a
third party study using major Council Meeting Agenda items as a basis for allocation and
anticipating real time detail time keeping by Town employees beginning in the 2009 fiscal year; 2)
A new Sewer Expansion Fund established for the purpose of segregating expansion related costs
from recurring costs for the existing system. Related policy issues to be determined by Town
Council are: a) treatment of connection fees; b) treatment of historical expansion related costs and
c) prospective General Fund contributions; and 3) Elimination of Solid Waste Fund in connection
with new solid waste vendor and contract.
Combined Fund balances are budgeted to decline $3.9 million (33%) from an estimated $11.9
million at 6/30/08 to $8.0 million at 6/30/09 primarily attributable to non recurring capital spending
of $1.4 million on the Pine Lane Sewer project, $1.1 million on Little League fields and $.9 million
on the Westwind Barn seismic retrofit and repair. The Westwind Barn work required totals an
estimated $1.8m of which one-half is expected to be funded by a third party, Supporters of
Westwind. The Surplus in Special Revenue Funds is budgeted to decline by $.5 million primarily
comprising $.2 million of Town Hall debt service, and $.2 million of Pathways spending. A
presentation of long term obligations includes $.6 million unfunded pension costs (as of 6/30/04 per
CalPers), $1.7 million capital lease payments due on Town Hall, and $1.86 million retiree medical
past service costs. The Committee will look into + and –‘s of prepaying one or more of these items.
A discussion of alternatives to substantial and rapidly rising Sheriff’s patrol cost was held noting
that possible alternatives are Los Altos Police Department, Foothill Police, and private security
augmented by police. Cost although important, is only one of other important considerations
underlying a decision to make a change. Carl noted that staffing this analysis would be considered
closer to contract expiration time on July 1, 2014 pursuant to Town Council direction.
Presentation from the floor: Roddy provided a brief update on the status of open Insurance
questions from the April 7 meeting. Insurance changes can not be effected until June 2009 and
decisions on changes, if any, need to be made by 12/31/08. No response to outstanding questions
posed to ABAG received to date. Carl expressed a preference for prioritizing work related to
AGAB Sharp (Workers Comp) because of the larger financial recovery opportunity.
Future Meeting Calendar: Next meeting is 5:30 pm Joint Budget Study Session with Town
Council, Thursday, May 22, 2008. June meeting canceled. Next meeting July 7.
Adjournment - The meeting adjourned at 6:45 p.m.
Minutes taken by Roddy Sloss and include editorial comments by Nick Pegueros.