HomeMy WebLinkAboutNovember 17Finance and Investment Committee Special Meeting
Town of Los Altos Hills
Town Hall, Monday, November 17, 2014
The meeting was called to order at 4:10 pm by Chairman Epstein.
Members present: Courtenay Corrigan, Allan Epstein, Kjell Karlsson, Jim Lai, Susan Mason,
Stan Mok, and Roddy Sloss.
Members absent: Frank Lloyd, John Radford, Bill Silver and Chris Welborn
Staff present: Yulia Carter, Administrative Services Director; Pak Lin, Finance Manager
Guests present: AJ Major, Partner, Vavrinek, Trine, Day &Co. LLP, the Town’s auditors
Public present: Bill Balsom
Approval of minutes
The October 6, 2014 Regular Meeting minutes were approved as presented by all members in attendance
who also attended the October 6, 2014 meeting.
Proposed Changes to Investment Policy
Carlos Oblites, Director, Asset Management, PFM Group, the Town’s investment advisor, forwarded a
marked draft of proposed changes from prior FIC meetings to the Town’s investment policy and a
memorandum he authored describing the changes. After discussion, the Committee recommended that the
criteria for Investment Advisor selection be changed from a minimum of $5 billion under management to $1
billion under management. The Committee unanimously voted in favor of sending the amended draft and
memo to Council for its review and approval.
Report on Council Activities of Interest by Courtenay Corrigan
Ms. Corrigan reported that the Council selected Mr. Harpootlian to be the Town’s next Vice Mayor and a
new Mayor will be selected by Council at its December 11, 2014 meeting.
Report on Finance department activities of interest by Yulia Carter
Ms. Carter reported that Workers Compensation insurance information is being gathered from third parties to
evaluate the Town’s program. She is studying four possible choices: 1) remain with the existing Association
of Bay Area Governments (ABAG) program and press for lower premiums; 2) make a self-insured election
with the ABAG Shared Area Risk Pool (SHARP) JPA (Joint Power Authority); 3) join another JPA; or 4)
initiate a stand alone self-insured program. At this time, it is not clear that all of these choices are available
to Town. Also Ms. Carter reported on a meeting with ABAG Pooled Liability Assurance Network (PLAN)
management to discuss its financial position attended by Mr. Cahill, Ms. Carter, Ms. Corrigan, and Mr. Sloss
and the CEO and CFO of the ABAG Plan. Mr. Sloss’ written meeting summary was distributed to the FIC.
ABAG PLAN financial condition although significantly improved is no longer a concern as their viability is
not directly threatened by regulatory action if their equity moves into a deficit position as previously
believed. . Mr. Sloss stated the remaining action item for the Ad Hoc Insurance sub committee to consider
is further reporting on Grants, which was discussed but no conclusion was proposed or reached.
November 17, 2014, 2014 FIC meeting, con’d. page 2.
Discussion of draft June 30, 2014 Combined Annual Financial Report (“CAFR”)
Mr. Major joined the meeting at this point. Ms. Carter and Ms. Lin made presentations highlighting
significant items reported in the CAFR. Mr. Major discussed CAFR disclosures on expected future reporting
rule changes. One major rule change (GASB 68) is the requirement to report the Unfunded Pension
Liability, which will be recorded on the Town’s financial statement for the first time at the end of the current
fiscal year. Other Post Employment Benefits (OPEB) unfunded liability will also need to be recorded in the
next few years; however a specific date has not yet been established by GASB. The letter to CAFR readers
from Mr. Cahill and Ms. Carter and the MD&A section highlight significant items which were discussed as
requested. In addition to staff and the auditors, Messrs. Epstein and Sloss reviewed an early draft document
before the meeting and offered comments which were incorporated into the draft document presented at the
meeting (which was substantially the same as the draft sent to all Committee members for review before the
meeting).
Mr. Major noted that the audit is complete, no material weaknesses or significant deficiencies in internal
control were noted, no limitations were imposed on the audit scope, there were no disagreements between
management and the auditors, management cooperated as requested, and the auditors do not believe
management consulted with other professional accounting firms in connection with matters under audit.
The Committee believes the CAFR document is substantially complete, although minor changes to the draft
are expected, and recommends it be forwarded to Council for their consideration and approval.
The Committee acknowledged and thanked the finance team, Ms. Carter, Ms. Lin, Mr. Sandhu, Mr. Major
and his firm for: the earliest audit completion in at least the last several years; a presentation thorough
enough to qualify the Town for consideration for a Government Financial Officers Association (GFOA)
award for excellence; and the smooth completion of the audit.
Presentations from the floor
None.
Proposed topics and dates for future meetings
The next FIC meeting date is Tuesday, January 13, 2015. Scheduled topics include progress on workers
compensation insurance review, report on CalPERS June 30, 2013 actuarial pension report issued this month,
a report on the need for a Sewer fund rate increase, and a report of future spending for Streets. Topics for
future meetings include reviews of written Town policies, procedures and practices; midyear budget update;
a Westwind Barn year end audit, and accounting and reporting insurance grants.
Adjournment
The meeting adjourned at 6:20 pm
Respectfully submitted by Roddy Sloss, Committee Secretary