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HomeMy WebLinkAboutNovember 14DRAFT Finance and Investment Committee Regular Meeting Town of Los Altos Hills Town Hall, Monday, November 14, 2011 The meeting was called to order at 4:30 pm. Members present: Allan Epstein, Kjell Karlsson, Jim Lai, Stan Mok, Jean Mordo, Bill Silver and Roddy Sloss. Member absent: Frank Lloyd, John Radford, and Lalla Stark Staff present: Nick Pegueros, Finance Director and Anna Erickson, Finance Manager. Guests present: Gary Waldeck, Town Council and AJ Major, partner Vavrinek Trine Day and Co LLP, Town Auditor Public Present: None Approval of minutes: Minutes of the September 12, 2011 were approved as submitted. Review of DRAFT Audited Town Financial Statements for the year ended June 30, 2011: Draft financial statements were available to Committee members for review on Friday, November 11, 2011. Mr. Pegueros handed out draft financial statements and a related slide presentation. He then made comments on the slides presented noting the basis of presentation, audit schedule, financial highlights, multi-year financial trends, and major budget variances. Next Mr. Major referred to standard draft letter reports handed out prior to the start of the meeting on Internal Control and respective responsibilities for financial reporting among town management and the town’s auditors. Mr. Major stated there were no reportable matters on internal control and that the Town would be receiving a “clean opinion” on its financial statements. He further noted that the audit went well and the change in the Town’s financial reporting software caused additional one time effort for the auditors as their work papers had to be updated to accommodate the new software. Mr. Major stated the new software was a benefit to the Town. In response to questions, it was noted that the financial statements include comparisons to a) an Original Budget approved by Town Council prior to the beginning of the fiscal year, and b) a Final Budget approved by Town Council just prior to the end of the fiscal year. The Final Budget is intended to reflect estimated balances for the fiscal year as judged in the last month of the fiscal year by Town management. The variances reported in the financial statements reflect differences between the reported balances for the fiscal year and the Final Budget. AJ Major explained that this presentation format is required. Committee members recommended two changes be considered: 1) add another variance column reflecting the difference between the Original Budget and the actual results. AJ Major will check to see if this presentation is permitted and respond to Mr. Pegueros. And, 2) for future fiscal years when amending the Original Budget, only include material changes enacted by the Council to cover greater than originally budgeted expenditures in the Final Budget. Mr. Karlsson excused himself from the meeting at this point. To facilitate the committee’s review, Mr. Mok requested a supplementary schedule (not part of the financial statements) showing major changes in the financial statements and movements in components of fund balances (Note 7B to the financial statements). A discussion of the presentation of Transfers in the financial statements and the effects of GASB 54 (a new accounting and reporting pronouncement) was held and related suggestions were made related to maintaining minimum balances in special governmental funds. Due to the elimination of the Solid Waste Fund as a result of changing waste companies in 2008 and lack of activity in the reporting periods, it was suggested that the Solid Waste Fund be deleted from the financial statement tables. Additions and clarifications to the financial highlights section of the report were suggested. And, additional variance explanations for the Sewer Fund were suggested. DRAFT FIC Minutes November 15, 2011, continued page 2. Report by Jean Mordo on recent Council activities of interest: A meeting with the library commission is planned to discuss a more fair distribution of funds. The Council will appoint a representative for the Town. Messrs. Mordo and Waldeck and Ms. Ericksson excused themselves from the meeting at this point. Report by Nick Pegueros on Finance Department activities: Mr. Pegueros did not have time to present the two agenda items noted below which are scheduled for the next FIC meeting. Copies of the October 2011 CalPERS annual pension report were provided to members who requested them. Proposed topics and dates for future meetings: The next FIC meeting is scheduled for 4 pm, Monday, January 9, 2012. The non recurring topics are: a) Follow- up on the MATRIX fee study (9/14/11 meeting) and b) presentation of the proposed Professional Services Bidding Policy. Mr. Mok proposed a discussion on issuing Bonds to take advantage of low borrowing rates. Adjournment: The meeting adjourned at 6:15 pm Respectfully submitted by Roddy Sloss, Committee Secretary