HomeMy WebLinkAboutFebruary 6 Finance and Investment Committee Special Meeting
Town of Los Altos Hills
Town Hall, Monday, February 6, 2012
The meeting was called to order at 4:00 pm.
Members present: Allan Epstein, Kjell Karlsson, Stan Mok, Jean Mordo, John Radford, Bill Silver and Roddy Sloss.
Member absent: Jim Lai, Frank Lloyd, and Lalla Stark
Staff present: Nick Pegueros, Finance Director
Guests present: Doug Pryor, Bartel & Associates – Town’s consulting actuary (5:00 pm)
Public Present: Gary Waldeck (in audience)
Approval of minutes: Minutes of the January 9, 2012 Regular meeting were approved as submitted.
Report by Jean Mordo on recent Council activities of interest:
Town Council will consider at its next meeting petitioning Santa Clara County to enable Town Council to appoint members
of the Los Altos Hills County Fire District as openings occur. Also, the Library Commission has referred proposals for
more equitable sharing of financial resources to a committee chaired by Carl Cahill. Consideration is being given to
proposing a poll to determine if LAH residents were in favor of participating in the funding of the LA Community Center.
Report by Nick Pegueros on Finance Department activities:
An offer will be made later this month to a candidate for the Finance Manager position. A Town fee study reviewed by the
FIC last year will be presented again to the FIC in May 2012. Fiscal year budget planning is proceeding on a schedule
similar to the one used last year and no major new items are presently anticipated.
Report by Doug Pryor June 30, 2011 GASB 45 Actuarial Valuation of Town’s Retiree Health Care Plan
The subject report dated January 11, 2012 was distributed prior to the meeting. Mr. Pryor discussed the report contents and
responded to questions. The effects of actuarial assumption changes by Bartel and Associates, early retirements of three
Town employees, and new investment options were discussed in detail.
The Plan's actuarial liability increased by 52%, $.7 million, in the two years ended June 30, 2011. Mr. Pryor stated $.2
million of this change was expected from assumptions made in the June 30, 2009 valuation and the remaining $.5 million
were primarily from adverse assumption changes for: 1) healthcare costs; 2) early retirement of three employees causing a
longer period over which related claims would be paid; 3) investment return, 4) mortality and 5) retirement timing.
PERS, the investment trustee, has asked participating agencies to choose between three alternatives for investment of Plan
assets primarily differentiated by the content of equity v. debt securities. Committee members requested more information
before concluding. Once an investment option is selected, the Agency is than asked to select an assumed return rate which
cannot be less than the 50% confidence rate that returns will be achieved. The combination of the two choices will
determine the discount rate (investment return assumption) used in actuarial calculations.
Presentations from the Floor:
None.
Proposed topics and dates for future meetings:
The next FIC meeting is scheduled for 4 pm, Monday, March 5, 2012. The non recurring topic is: a) A review of issues
related to prepaying OPEB liabilities presented by Keenan Associates, a follow-up analysis on selecting alternative
investment plans, and a discussion on actions to be taken to address increased OPEB liabilities.
Adjournment: The meeting adjourned at 5:35 pm
Respectfully submitted by Roddy Sloss, Committee Secretary