HomeMy WebLinkAboutJuly 6Finance and Investment Committee Regular Meeting
Town of Los Altos Hills
Town Hall, Monday, July 6, 2015
The meeting was called to order at 4:30 pm by Chairman Epstein.
Members present: Courtenay Corrigan, Allan Epstein, John Harpootlian, Kjell Karlsson, Susan
Mason, Roddy Sloss and Chris Welborn.
Members absent: Stan Mok and Bill Silver
Associate members: Frank Lloyd, present; Jim Lai, absent
Staff present: Pak Lin, Interim Finance & Admin. Services Director
Public present: None
Approval of minutes
The prior meeting minutes were approved by members attending the prior meeting.
Report on Council Activities of Interest by Courtenay Corrigan and discussion of Allan Epstein proposal for
financing costs required to bring private roads up to the Town’s standard
Council Member Larsen is resigning effective August 31, 2015. Council will consider alternatives for Mr. Larsen’s
replacement at its next meeting. Committee members who have not completed Brown Act training by July 1, 2015
assume Associate member status (non voting). Council will consider reinstatement to full committee membership
after completion of Brown Act training and to the extent such Associate Members request reinstatement.
Regarding resident requests to convert private roads to public (Town maintained) roads, an ad hoc Council
subcommittee comprising Mr. Waldeck and Ms. Corrigan was formed, has met with interested parties and
performed research as further described in a meeting handout. Ms. Corrigan stated that she is interested in working
in partnership with private street residents to get their roads accepted. Mr. Epstein proposed a financing approach
that might be helpful in forming these partnerships that was distributed to Committee members prior to the meeting
and that was discussed in the meeting. Attending committee members Corrigan, Karlsson, Welborn and Associate
Member Lloyd reside on private roads. Committee members expressed concerns about establishing precedents,
limitations on available Town financial resources, fairness to all affected residents residing on private roads, and
incremental continuing Town maintenance costs. With abstentions by the two Council members serving on the
Committee, all attending members endorsed a proposal for Council’s further consideration with the following
elements: 1) Town funds could be loaned to residents for the sole purpose of bringing their private road up to the
standard required by the Town to adopt the private road (making it a public road); 2) Considering the Town’s
present financial position, the maximum amount of all such loans outstanding could not exceed $500,000; 3) The
loans would be collateralized by a recorded lien on all the properties fronting on the private road and the lien would
be superior to all mortgage liens (similar to a liens placed by a Mello Roos district when it loans funds to residents
of a community); 4) Other terms of the loan will be determined after further study. The committee discussed
making these terms sufficient to enable the Town to sell the loan at par to a broker or lender. 5) The underlying
effort to solicit, disclose and receive letters of willingness to participate must be performed by the residents’ (as
compared to Town staff); 5) Costs incurred by residents to bring such a proposal to Town Council will be entirely
borne by the residents; 6) Due diligence costs incurred by the Town related to such resident proposals will paid for
by the Town; 7) All residents with property fronting on the private road must consent to the terms of the financing;
8) Town would contract and supervise road repair; and, (9) the loan repayment would be added to the homeowner’s
annual property tax bill.
July 6, 2015 FIC meeting minutes, con’d. page 2.
Report on prepayment of Solar Panel loans by Pak Lin
Ms. Lin distributed a handout showing the existing amortization schedules of the two existing solar panel loans
along with a calculation of estimated savings of $7,391.23 (assuming a cost of capital of 0.5% compared to
weighted average borrowing cost rate of 3.6%) over nine years as a result of prepaying $81,360.54 of outstanding
principal on the subject borrowings. She stated based on a review of the loan documents, there is no prepayment
penalty. After discussion, with an abstention by John Harpootlian, all other members voted in favor of
recommending to Council that the two subject loans be prepaid.
Report on Finance department activities of interest by Pak Lin
Ms. Lin reported that the Town received the Government Finance Officers Association Distinguished Presentation
Award for the June 30, 2014 Comprehensive Annual Financial Report. Recruiting for the open Administrative
Services and Finance Manager positions has not yet begun. The open Finance Manager position is currently staffed
with a consultant, Ms. Lin is Interim Administrative Services Director and intends to be a candidate for the
permanent position. Interim work for the June 30, 2015 annual financial statement audit has begun with a target
financial statement publication date in November or December similar to the prior year. Liability and Workers
compensation costs are expected to increase by 27% to approximately $180,000 in FY 2016 compared to FY 2015
primarily due to payroll cost increases. Ms. Lin plans to further study the matter and report in more detail at the
next FIC meeting. Work toward improving the Town’s website is progressing with expected one-time costs of
approximately $30,000 and estimated completion in January 2016. Staff will be evaluating an online business
license system as proposed in the adopted FY’16 Budget. Work on enhancing performance or upgrading the
Filemaker building permitting system software has not begun. The Town has received and is evaluating quotes for
actuarial services to perform the bi annual OPEB actuarial report. Ms. Lin is unaware of the completion status of
the non residential rate portion of the Sewer Rate Study.
Election of Committee Officers
All voting members of the committee unanimously elected the following members to serve one year terms:
Allan Epstein, Chairman; Susan Mason, Vice Chairman; Roddy Sloss, Secretary. Mr. Epstein’s appointment
requires Council approval as he is completing two successive one year terms.
Presentations from the Floor
None.
Proposed topics and dates for future meetings
The next FIC meeting date is Monday, August 31, 2015 at 4:30 pm. A report by PFM, the Town’s investment
manager, is planned. Updates on Finance Department controls (standard format), insurance costs and new non
residential sewer rates were requested. Topics for future meetings include reviews of written Town policies,
procedures and practices; accounting and reporting for insurance grants; OPEB review, opportunities to prepay
unfunded pension liabilities, if any, Filemaker / websites updates and updated reporting format for Finance staff
projects.
Adjournment The meeting adjourned at 6:40 pm.
Respectfully submitted by Roddy Sloss, Committee Secretary