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HomeMy WebLinkAboutAugust 25Finance and Investment Committee Special Meeting Town of Los Altos Hills Town Hall, Monday, August 25, 2014 The meeting was called to order at 4:00 pm by Chairman Epstein Members present: Courtenay Corrigan, Allan Epstein, Kjell Karlsson, Frank Lloyd, John Radford, Bill Silver, Roddy Sloss and Chris Welborn. Members absent: Jim Lai, Stan Mok and Susan Mason Staff present: Yulia Carter, Administrative Services Director; Pak Lin, Finance Manager Guests present: Carlos Oblites, Director, Asset Management, PFM Group; Edward Polansky, key account manager, PFM Asset Management LLC Public present: Bill Balson Approval of minutes The July 7, 2014 Special Meeting minutes were approved as corrected by all members in attendance who also attended the July 7, 2014 meeting. Report on Finance department activities of interest by Yulia Carter Ms. Carter reported that the 2014 financial audit interim work was completed without issue. Fieldwork for the balance of the audit is scheduled to begin October 6, 2014. Report on Council Activities of Interest by Courtenay Corrigan Ms. Corrigan reported that distribution of $30,000 of budgeted charitable contributions would be discussed at the next Council meeting Mr. Epstein, who attended the July Council meeting where road rehabilitation projects planned were discussed and awarded, reported that $1,340,000 was budgeted and of this amount, approximately $400,000 is not yet committed to specific projects. Selection of roads to be rehabilitated is based on a methodology that takes into consideration the current road condition and the most cost effective long term method to maintain all roads. One of the 16 formerly private now public roads was included in the scheduled work. Pavement Index ratings on the remaining roads is scheduled to be complete in October. Report on Town Investment Policy by Carlos Oblites Mr. Oblites presented PowerPoint slides distributed to the Committee before the meeting plus an additional page showing estimated FY‘15 risk and return of various investment strategies. The policy review included internal procedures, eligible investments, eligible maturities, credit limits, concentration in individual issuers and concentration by classes of investment. Mr. Oblites explained that 1) the few suggested section and format changes to the policy were considered “best practices” as defined by the Association of Public Treasurers, 2) the Town’s existing policy closely follows those guidelines, and 3) suggested changes to permitted investments, maximum allocations, maturity and concentration per issuer would not necessarily result in a change to the Town’s investment practice but would make the Town’s policy more consistent with the California Government Code while providing additional investment opportunities that could increase yields and improve diversification. The Committee responded with questions and suggestions all of which will be incorporated into a new draft to be presented at the next FIC meeting by Mr. Oblites for further August 25, 2014 FIC meeting, con’d. page 2. discussion and review including eliminating Commercial Paper as an investment option. After the FIC’s review is completed, recommendations for changes, if any, will be forwarded to the Town Council for consideration. Property and Liability Insurance Review by Roddy Sloss Before the meeting, Mr. Sloss distributed draft PowerPoint slides presenting his review of the Town’s Liability and Workers Compensation insurance coverage primarily based on Town documents provided by Ms. Carter. Updated slides were presented at the meeting. In the interest of time, Mr. Sloss’ comments focused on recommendations from his review. Mr. Sloss noted that the ratio of cumulative workers compensation claims paid to premiums was in the low double digit range over the past 12 years and that the City of Los Altos experiencing similar results chose to change to a self insured third party administered workers compensation program where the city’s costs more closely reflected its experience. Mr. Sloss noted that the Town, because of its size may or may not be eligible for a similar program, and recommended the subject be investigated. The Committee asked Ms. Carter to investigate and report at its next meeting. Other recommendations including 1) considering alternative insurers for property and casualty insurance, 2) review of availability and desirability of earthquake property coverage, 3) performing a study of insurer grant awards for the purpose of determining if a larger economic benefits were available, and 4) a review of LAWCX (workers compensation excess insurer) financial statements will be undertaken by an ad hoc committee including Ms. Carter, Vice Mayor Corrigan, Mr. Karlsson and Mr. Sloss. Westwind Community Barn and Concessionaire’s Six month financial review by Allan Epstein A presentation on the matter was prepared and distributed to the Committee. Due to lack of time, this review will be presented at the next FIC meeting. Presentations from the floor: None. Proposed topics and dates for future meetings: The Committee reviewed and updated the FIC Key Projects Report handed out in the meeting. The next FIC meeting date is Monday, October 6, 2014. Scheduled topics include workers compensation insurance, proposed investment policy changes, and a review of the first six months of the Westwind Barn Concessionaire’s financial results. Topics for future meetings include reviews of Pensions, changes to property and casualty liability insurance, written Town policies, procedures and practices, Audit and FY’14 CAFR and Sewer Fund rates. Adjournment: The meeting adjourned at 6:00 pm Respectfully submitted by Roddy Sloss, Committee Secretary