HomeMy WebLinkAboutMay 5Finance and Investment Committee Regular Meeting
Town of Los Altos Hills
Town Hall, Monday, May 5, 2014
The meeting was called to order at 4:00 pm by Chairman Epstein
Members present: Courtenay Corrigan , Allan Epstein, Kjell Karlsson, Frank Lloyd, Roddy
Sloss and Chris Welborn.
Members absent: Jim Lai, Susan Mason, Stan Mok, John Radford, Bill Silver
Staff present: Carl Cahill, Town Manager, Yulia Carter, Administrative Services Director,
and Tony Sandu temporary Finance Manager
Guests present: None
Public present: Bill Balson
Approval of minutes:
The April 7, 2014 Regular Meeting minutes were amended and were approved by all members in attendance
who also attended the April 7, 2014 meeting
FY’15 Budget Preliminary Base Budget and Revenue discussion – Y Carter:
Ms. Carter issued a one page comparative revenue summary to members prior to the meeting and presented
ten PowerPoint slides on screen and in hardcopy during the meeting. Property tax revenue assumptions
provided by Hdl are based on actual changes recorded by the assessor and are a 4.2% increase as compared
to a 3.8% forecast by the County Assessor. Consistent with past practice property tax revenues do not reflect
planning and building permit activity that has not yet resulted in an assessment change and therefore property
tax revenue assumptions are believed to be conservative. Budgeted Use of Money and Property revenues
includes $15,000 of investment interest income which is comparable to expected results for the current fiscal
year. The budgeted decrease in Miscellaneous revenues reflects the absence of a Comcast $60,000 grant
present in the current year. As noted in the handout, Licenses & Permits and Charges for Services are
projected to increase 27.8% and 29.8%, respectively. This increase is due primarily to the recently approved
increases in fees. FY’15 activity level was estimated to be equal to the average of FY’14 and FY’13 and
Park and Recreation revenue declined by 74.2% due to the new WWB operator collecting revenue, The
Other Revenues budget line items reflect estimated current year activity except for a known $9,500 increase
in Gas taxes.
Cost assumptions include a $92,100 increase in compensation costs in the form of a “bucket” reflecting both
merit increases and market adjustments expected to issue from a compensation study currently underway
(which costs are also included in this increase.) The $135,000 insurance costs line item includes all
insurance lines except workers comp.and health insurance and is significantly higher than similar costs in
recent years. More details will be presented in the next budget meeting.
Staff proposed collapsing Parks and Recreation funds into the General Fund in FY’15 subject to Council
approval. The merits of this approach were discussed and seemed reasonable particularly considering the
substantial reduction in complexity due to the WWB concessionaire. Individual accounts will still be
maintained to collect cost and provide historical comparisons. This structure change will be discussed at the
May 5, 2014 FIC meeting, con’d. page 2.
next meeting including the rationale for originally establishing the funds. Also, all employment related
expense will be removed from the Internal Service Fund.
Report on Town Council Activities of Interest:
Mr. Epstein reported that in the last Council meeting the User Rate study was approved with minor changes.
Council has requested a Staff report showing fees that increased more than 100%. Vice Mayor Corrigan
reported a discussion of recording FIC meetings was held with four Council members indicating their
opposition to official recording of FIC meetings.
Report by Yulia Carter on Budget Preparation and Finance Activities of Interest:
The joint Council FIC budget review session is scheduled for 4 pm 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. The proposed annual OPEB contribution is substantially greater
than the minimum required contribution and significantly less than historical contributions. This
contribution will be discussed. Budget review packets will be available May 27, 2014, to facilitate Council
and FIC member Q&A with staff prior to the meeting.
Ms. Carter stated the Town made three offers to Finance Manager candidates all of which were declined.
Staff believes the substantial reduction in fringe benefits when long term government workers move from
other agencies to the Town were an important factor in the rejections. The Town is re advertising the
position with an emphasis on candidates without extensive municipal finance experience.
Presentations from the floor:
Bill Balson expressed his belief that five year plans should be developed in light of what he believes to
Calpers unrealistic earnings assumptions. Ms. Carter stated that a brief five year “outlook” is included as
part of the budget.
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. A current report from PFM, the Town’s asset manager was requested. The next regular meeting
date of the FIC is Monday, June 2, 2014 and is a joint meeting with Council to discuss the proposed fiscal
year 2015 budget. 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 5:50 pm
Respectfully submitted by Roddy Sloss, Committee Secretary