HomeMy WebLinkAboutApril 7Finance and Investment Committee Regular Meeting
Town of Los Altos Hills
Town Hall, Monday, April 7, 2014
The meeting was called to order at 4:00 pm by Chairman Epstein
Members present: Allan Epstein, Kjell Karlsson, Jim Lai, Susan Mason, Stan Mok, John
Radford, Bill Silver, Roddy Sloss and Chris Welborn.
Members absent: Courtenay Corrigan, Frank Lloyd
Staff present: Carl Cahill, Town Manager, Yulia Carter, Administrative Services Director,
and Tony Sandu temporary Finance Manager,
Guests present: Doug Pryor, Vice President Bartel and Associates
Public present: Bill Balson
Introduction of new FIC member:
Chris Welborn briefly described his background and interest in serving on the FIC.
Approval of minutes:
The March 3, 2014 Regular Meeting minutes were approved as submitted (abstention Bill Silver, who was
not at meeting and Stan Mok, who was not in attendance at the time of the vote.
Presentations from the floor:
Mr. Balson, a resident, presented two handouts expressing his view that certain general governmental
expenses should not be included in the indirect cost pool used in the calculation of Town's Cost of
Services Schedule (User Fees) and that changes to such fees should be certified as being compliant with
OMB Circular A-87 “Cost Principles for State, Local and Indian Tribal Governments” (for use in
determining reimbursable costs for federally sponsored contracts.) No further discussion took place. Mr.
Epstein thanked Mr. Balson and noted that because User Fees were not on the meetings’ agenda, no action
could be taken.
Actuarial Report on town’s Retiree Medical Plan by Doug Pryor:
Mr. Pryor’s report for the two year period ended June 30, 2013 was distributed in advance.
Report Highlights:
• There are 29 participants in the plan of which 11 are retired and 18 are active with 12 of the actives
having been hired after 10-11-2007 (second tier).
• During the two year period ending 6-30-2013 Actuarial Accrued Liability (AAL) decreased from $2.
62 MM to $2.23 MM, primarily due to lower than expected premium increases.
• Actuarial Value of Assets increased from $0.7 MM to $1.2 MM, mostly due to additional
contributions but $106,000 was due to earnings in the two year period.
As a result Unfunded Actuarial Accrued Liability (UAAL) decreased $905,000 to $1.02 MM, or 47%.
However, due to a proposed change in the “Implied Subsidy” UAAL will increase $300,000 to $400,000 in
the fiscal year ending in either 2015 or 2016.
April 7, 2014 FIC meeting, con’d. page 2.
• The net OPEB obligation (NOO) is a credit and is recorded as an asset on the Town’s balance sheet.
It is expected to increase to a $439,000 at 6-30-2014 as a result of prior Town contributions
exceeding minimum requirements.
• The Annual Required Contribution (ARC) is projected to decrease to $118,000 in FY’15. However,
it is expected to increase $30,000 to $40,000 after the Implied Subsidy change occurs.
• Market returns for the plan’s Trust portfolio in FY’09, FY’10, FY’11, FY’12 and FY’13 were -
22.5%. 15.6%, 22.0%, 0.0% and 11.6%, respectively. The Town’s projections are based on a 6%
annual return, which is less than CalPERS 7.6% assumption.
Mr. Pryor described the contents of his report and responded to questions. He noted that due to work
currently underway at the GASB, the UAAL is likely to be recorded in the Town’s financial
statements in the future (perhaps the year ended the year ended June 30, 2017 or 2018). Mr. Pryor noted
that due to past funding in excess of minimum requirements the Town could fund: a) as little as nothing for
FY’14 and FY 15; or b) the annual required contribution of $118,000; or c) more if it so chose. A funding
level recommendation was deferred until the Town’s annual budget discussion where availability of funds
and other demands are presented. In connection with considering future funding levels, Mr. Sloss will
investigate further the assumptions driving future liabilities.
Report on Council Activities:
Mayor Radford noted that due to a failure to provide required notice the Council will be evaluating the
Town's Cost of Services Schedule again in its next regular meeting scheduled for April 17, 2014.
Report by Yulia Carter on Budget Preparation and Finance Activities of Interest:
The joint Council FIC budget review session is scheduled for June 2, 2014. The FIC asked Ms. Carter to
focus her discussion points on major revenue and spending changes compared to last year’s budget (such as
the Barn), major infrastructure spending items, reserve changes and adequacy, and an analysis indicating
whether or not the budget is in balance.
Ms. Carter stated the Town has made an offer to Finance Manager candidate and is awaiting the response.
Proposed topics and dates for future meetings:
The Committee reviewed the FIC Key Projects Report handed out in the meeting and updated the status of
the items. The next regular meeting date of the FIC is Monday, May 5, 2014. Agenda items include
discussing the FY”15 budget with an emphasis on revenue items and change in reporting structure. Topics
for future meetings include reviews of Insurance, Pensions, Accounting Policies and Procedures and
Westwind Barn six month’s results.
Adjournment:
The meeting adjourned at 5:48 pm
Respectfully submitted by Roddy Sloss, Committee Secretary