HomeMy WebLinkAboutAugust 2DRAFT - Finance and Investment Committee Meeting
Town of Los Altos Hills
Town Hall Council Meeting Room
Monday, August 2, 2010
Chair Roddy Sloss who prepared these minutes called the meeting to order at 5:10 p.m.
Members present: Allan Epstein, Frank Lloyd, Jean Mordo, Stan Mok, Roddy Sloss, Lalla Stark
Members absent: Jim Lai, Bill Silver
Staff present: Nick Pegueros, Finance Director
Guest present: Carlos Oblites, PFM Asset Management LLC (Investment Manager for the Town)
Public Present: None
Approval of minutes: The June 7, 2010 meeting minutes were approved as submitted.
Report by Jean Mordo on Recent Council Activities of Interest:
The Council adopted a new water conservation ordinance imposing water usage limitations on residents building
new homes or undertaking major house remodels. Landscaping deposits will be forfeited for violations. In
general, the standard restricts water usage to 80% of the recently adopted State standard which is believed to be
in excess of current usage by most households. The Council intends to work with water providers so that other
residents will be advised of their usage relative to their limit but will not be penalized for non compliance.
Fast Track building standards were updated to add a numerical compliance factor. New Home Developments
with a factor meeting the minimum standard are allowed to utilize the Fast Track procedure regardless of
neighbor objections. Neighbors retain the right to object and be heard.
Report by Nick Pegueros on Recent Finance Department Activities:
The temporary full time accountant is continuing to perform well. A formal hiring process is planned for
September.
Tyler financial software conversion is underway but it is too soon to measure progress or effectiveness.
The County Assessor reports that the Town will incur an $18,000 decline in property tax revenues during fiscal
ended June 30, 2011. The 2011 Town budget forecasted no change in property tax revenue from the prior year.
The CalPERS check paying off the Pension Plan Side Fund issued timely and the Town Budget has been revised
accordingly. A revised budget was handed out and it was noted that cash balances still need to be updated.
Report by Carlos Oblites on Town investment activities:
The Town has $13.1 million under PFM’s management at June 30, 2010 with a weighted average maturity of
9.5 months and a weighted average interest income rate of 0.27% for the quarter ended June 30, 2010. 83% is
invested in US Treasuries, 13% is in a AAA rated reserve portfolio, and 4% is in Federal Home Loan Agency
Notes. Mr. Oblites contrasted the Town’s investment strategy to the 1 year and 1-3 year Merrill Lynch Treasury
indices noting it compared favorably to the one year index and below the 1-3 year index. Mr. Oblites noted that
interest rates are expected to remain low and flat for at least a year based on several leading indicators but that a
Bloomberg survey of leading financial institutions forecast rates rising 3% beginning in the fourth quarter of
2010 through 2011.
After discussion, the Committee recommended a change to the Town’s investment strategy calling for a
migration of 20% of the portfolio to enable PFM to invest up to 20% of the Town’s portfolio in securities with
an average maturity of 2 years.
Continued
DRAFT - Finance and Investment Committee Meeting Minutes, Monday, August 2, 2010 – page 2.
Separately, in accordance with the FIC policy of reviewing Town investment at least once a quarter, Mr. Sloss
received copies of bank statements from Bank of America and Comerica as of June 30, 2010 noting $2.9 million
on deposit without interest at Bank of America (collateralized by Treasury securities), and $750,000 invested in
CDs maturing through 5/31/2011 at an average rate of 0.7% at Comerica.
Election of Officers for the Committee:
The following members were elected officers for the 2011 fiscal year.
Allan Epstein - Chairman
Bill Silver - Vice Chairman
Roddy Sloss - Secretary
Next FIC meeting is tentatively scheduled for September 13, 2010, but the date will be announced by Allan
Epstein.
Mr. Epstein requested that Committee members furnish him with a list of proposed topics for future meetings.
Adjournment - The meeting adjourned at 6:40 p.m.