HomeMy WebLinkAboutJune 3Finance and Investment Committee Regular Meeting
Town of Los Altos Hills
Town Hall, Monday, June 3, 2013
The meeting was called to order at 4:00 pm by Vice Chairman Epstein
Members present: Allan Epstein, Kjell Karlsson, Jim Lai, Frank Lloyd, Stan Mok, John
Radford, Bill Silver, Roddy Sloss, and Gary Waldeck.
Member absent: Susan Mason
Staff present: Yulia Rasulova, Administrative Services Director
Public present: None
Guest present: Chris Fisher, Project Director, Willdan Financial Services
Proposal to reduce budgeted annual contribution to OPEB retiree medical plan:
Attachment E to May 20, 2013 Joint FIC Council Study Session on the 2014 budget,
recommends a $179,100 reduction in the prior annual $300,000 Town contribution to the OPEB
retiree medical plan. Although permitted, the Committee has recommended (7 in favor, 1
against, G Waldeck, and 1 abstention, J Radford who prefers to fund additional contributions
from favorable budget vs. actual variances) a $300,000 contribution because the Plan is
underfunded by more than $1 million and because funds invested in the Plan are expected to
return 5% to 7% as compared to less than 1/2% if the cash remains in the General Fund.
Proposal to change funding policy for special operating funds by eliminating advance funding for
overhead (allocated) costs:
This is an unquantified onetime benefit to the General Fund. Given the Town’s plan to merge Special
Operating Funds into the General Fund next year, this proposal would have had a similar effect on the
2015 Budget as opposed to the 2014 Budget. No opposition to this proposal was voiced.
Mr. Sloss also recommended the Council receive an analysis from Staff before concluding on the 2014
budget showing recurring revenues less recurring costs and non recurring revenues less nonrecurring
costs so that the Council would know whether or not it had a balanced budget for recurring activities.
Presentation by Willdan Financial Services on town wide overhead allocation study:
The subject of whether or not overhead should be allocated to recurring capital expenditures such as the
$800,000 annual Street Fund capital spending budget was discussed. Mr. Sloss favored this allocation
method because he believes it is more fair and representative. In response to questions, Mr. Fisher
representing Willdan noted that the methodology used allocates no overhead to capital spending which is
the normal practice. Mr. Silver noted that by excluding an overhead allocation to capital, the Town had
more flexibility as to fees that could be charged for other activities such as planning and building permits,
inspections and reviews. The Committee did not move to vote on this matter. Mr. Radford excused
himself from the meeting.
Next, Mr. Fisher reviewed handout material distributed before the meeting explaining the study
methodology and the flexibility of the excel spreadsheet model it used in performing this work. The
FIC minutes June 3, 2013 page 2.
Town plans to allocate approximately $3 million in overhead in the 2014 budget of which approximately
$1.2 million is covered by the Willdan study. The remaining $1.8 million was not incorporated in the
Willdan study and represents the Town’s employee benefit costs, town hall costs, corporate yard costs
and vehicle pool costs. These costs will be allocated using the methodology used in prior years
principally based on an allocation of equivalent head count to recipient departments. Overall,
approximately $1 million of costs are being allocated in the 2014 budget in excess of prior years
representing primarily Administrative Services, City Manager and Insurance. Work to be completed is
the Fee Study which will be repeated again next year when the Internal Service Fund and Special
Operating funds are combined into the General Fund.
Approval of minutes:
Minutes of the April 1, 2013 special meeting were approved as presented.
Report by Gary Waldeck on recent Council activities of interest:
The Barn request for proposal is almost complete. A concessionaire should be in place by October 1,
2013. Actions have not yet been planned for the $200,000 private road designation in 2014 Budget.
Administration and Finance Department Activities of interest – Yulia Rasulova:
None.
Presentations from the floor:
None.
Sewer Fee Rate Study suspended:
The Sewage Treatment Plant staff presented estimated costs and timing to Council in July 2012 which
initiated the Sewer Rate Study. Messrs. Epstein and Sloss reported that the Sewer Fund Rate study
recommended by the Committee was suspended after it was learned that the Palo Alto Sewer District is
actively re budgeting the cost and timing related to its plans to renovate the sewage treatment plant. The
Committee voiced no objection to suspend the rate study until new estimates of cost and timing are
presented by the treatment plant staff to Council.
Proposed topics and dates for future meetings:
The FIC meeting scheduled for July is cancelled. The next FIC regular meeting is Monday, August 5,
2013 at 4pm. Topics suggested for future meetings are reviews of the Town’s insurance (R Sloss), review
of 7/1/14 Sheriff’s contract renewal (C Cahill), Fee Study (Y Rasulova), Interim Financial
Reporting (Y Rasulova and R Sloss), Advance Funding Employee Benefit Liabilities (F Lloyd) and
follow-up on West Wind Barn costs (G Waldeck and Y Rasulova).
Adjournment:
The meeting adjourned at 6:00 pm
Respectfully submitted by Roddy Sloss, Committee Secretary