HomeMy WebLinkAboutDecember 4Finance and Investment Committee Special Meeting
Town of Los Altos Hills
Town Hall, Monday, December 4, 2017
The meeting was called to order at 4:00 pm by Chairman Sloss.
Members present: Allan Epstein, Betty Kayton, Kjell Karlsson, Susan Mason, Bill Silver, Roddy
Sloss and Chris Welborn
Members absent:Stan Mok and Chris Nam
Associate members:Jim Lai, present; Frank Lloyd, absent
Council:Gary Waldeck, present; John Radford, absent
Staff present:Carl Cahill, City Manager; Karen Huang, Finance Manager, Tony Sandhu –
Finance Consultant and Frances Reed, Administrative Services Technician
Public present: none
Guests present:David Alvey, Audit Partner, Maze & Associates
Approval of minutes:
October 25, 2017 meeting minutes were approved as amended by members who attended that meeting.
June 30, 2017 Draft CAFR Review – David Alvey, Karen Huang
Members received a draft CAFR for review prior to the meeting. Mr. Alvey stated that: The audit opinion is
‘clean’ and will be dated December 4, 2017; There are no required communications (e.g. issues with staff or other
auditors communications); and A memorandum relating to new financial accounting standards affecting the June
30, 2018 year will be issued to management. Mr. Alvey stated that the Maze audit approach focuses on internal
controls and that the Town’s internal controls were good. A brief discussion was held on accounting and
reporting for Pension and OPEB planned transactions for the fiscal June 30, 2018 year under two new GASB
standards that went into effect in the June 30, 2017 year. Ms. Huang noted that a physical inventory of the
Town’s personal property fixed assets (primarily rolling stock) was taken during the year by staff with no
exceptions. Mr. Alvey excused himself from the meeting.
Ms. Huang presented eight PowerPoint slides noting the Town’s financial health is good, and both cash and
unassigned General Fund balances increased significantly over the prior year. The Sewer Fund has an
unrestricted Net Position of $2.6 million similar to the prior year. Accounting for Unfunded Pension and OPEB
liabilities were discussed including new GASB requirements. The FIC voted unanimously in favor of
recommending the CAFR to Town Council for approval.
Mr. Epstein repeated his concern that the Town may have charged the Sewer Fund with an unreasonable share of
Town administrative overhead and operational costs and that Planning and Building fees charged in the last few
years may have recovered amounts in excess of cost. Mr. Epstein reminded the staff that this had been a concern
for a number of years and the staff’s commitment to investigate these matters in the current fiscal year. Mr.
Sandhu stated that recent work on last year’s recovery of fees indicated an 86% recovery rate. Mr. Epstein
requested the analysis be provided to the FIC.
Continued.
December 4, 2017 FIC minutes, continued page 2.
Discussion of Strategy Options for Section 115 Trust - R Sloss
Town Council in its November 2017 meeting approved proceeding with arrangements for a $500,000 initial
investment in a Section 115 Pension Trust managed by PARS. A Moderate investment strategy option was also
approved. The FIC discussed options for 1) using either Mutual Funds or Index Funds to execute the Moderate
Strategy and 2) Investing the $500,000 in a lump sum or at $100,000 per month for five months. The FIC voted
to recommend to Council the Index option and the $100,000 a month for five months option. Balloting is
attached.
Report on Finance Department activities of interest – Karen Huang
Ms. Huang stated that arrangements are in process with PFM, the Town’s investment advisor, to make funding
available for the planned CalPERS prepayment approved by Council in its November 16, 2017 meeting. Pak Lin
will return from family leave in early January. Work on the CAFR is nearing completion. Next Ms. Huang will
focus on final disclosure matters in the Town’s fiscal year 2018 Budget document.
Report on Council activities of interest – Gary Waldeck
Mayor Waldeck described a process underway to gain a new and unique ZIP Code for the Town and its
sphere of influence. He encouraged FIC members to raise questions if they do not support the initiative.
Mayor Waldeck also reported that in the Joint Los Altos –Los Altos Hills Council Meeting the City
requested that the Town contribute toward the construction costs of a new community center. Any
amount would be appreciated; however Mayor Pro Tem Mordo suggested $2 million. The Town’s new
mayor may place the matter on the Council’s agenda in the new calendar year.
Review of future meeting calendar:
The next FIC meeting will be a Special meeting on January 8, 2018 to receive the Bickmore biennial actuarial
report on the Town’s OPEB Fund. Other topics for future meetings are: Section 115 Trust Investment Policy
Statement, Workers Comp. provider change, review of long term capital plans and related policies, complete work
on prepayment of OPEB and Pension liabilities; Financial policy and procedures review; Status of Planning and
Building software (Filemaker replacement), Cost Recovery/Cost Allocation Study, LAH Sewer rate study and
updates to related published schedules and literature, review of FIC Monthly Project Summary Report and review
of Quarterly Finance Department report on financial controls.
Presentations from the floor:
None.
Adjournment:
At approximately 5:25 pm there were no further matters to be discussed and the meeting adjourned.
Respectfully submitted by Roddy Sloss, Committee Secretary
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