HomeMy WebLinkAboutFebruary 5
Finance and Investment Committee Regular Meeting
Town of Los Altos Hills
Town Hall, Monday, February 5, 2018
The meeting was called to order at 4:00 pm by Chairman Sloss.
Members present: Allan Epstein, Kjell Karlsson, Susan Mason, Stan Mok, Chris Nam, Bill Silver,
Roddy Sloss and Chris Welborn
Member absent: Betty Kayton
Associate members: Jim Lai, absent; Frank Lloyd, absent
Council present: John Radford, Mayor; Roger Spreen, Vice Mayor
Staff present: Pak Lin, Finance and Administrative Services Director; Karen Huang, Finance
Manager, Frances Reed, Administrative Services Technician
Public and Guests present: none
Approval of minutes:
January 8, 2018 meeting minutes were approved as presented by members who attended that meeting.
2017/18 Mid-Year Financial Update and Budget Amendment Summary – Pak Lin
Ms. Lin made a PowerPoint presentation distributed to participants before the meeting covering the subject
matter. The underlying work was facilitated through a soft closing of the Town’s accounts through December
31, 2017 including recognition of liabilities at December 31, 2017 that were invoiced and/or paid by January 31,
2018. Although 47% of budgeted revenues and 42% of budgeted expenditures for the General Fund, and 63%
of budgeted Revenues and 40% of budgeted expenditures for the Sewer Fund were reported as of December 31,
2017, the budget is believed to be on track for the June 30, 2018 fiscal year. Property tax collections through
January 31, 2018 were not higher than expected from prepayments because of income tax law changes. It is
believed that County is applying Teeter Plan rules that call for the County making property tax payments to the
Town when scheduled regardless of when received. Planning and Building activities have slowed compared to
the comparable period of the prior year. Planning and Building revenues (reported under Charges for Services
and Licenses and Permits) and expenditures were roughly comparable through December 31, 2017 compared to
the prior year when revenues were higher than expenditures due to the receipt of fees before the related costs
were incurred. Numerous additional staff comments are noted in the presentation including a progress report on
multi-year capital projects.
Council activities of interest – John Radford
Mayor Radford described an upcoming Goal Setting meeting he is chairing for identifying long-term non-
recurring needs and requirements of the Town in an effort to prioritize these matters as a first step in making
more detailed long-term capital plans. In that regard, Mr. Radford was desirous of completing a 10 year
financial plan and invited meeting participants to provide inputs particularly regarding future unfunded actual or
foreseeable requirements that may require financial reserves. Staff will be preparing a financial presentation
supporting the meeting agenda. Meeting participants suggested including the following items on the list of
possible reserves: Uninsured earthquake risk; other self-insured risks; Vehicle replacement; Unfunded Pension
and OPEB liabilities, and Pathways.
Continued.
February 5, 2018 FIC minutes, continued page 2.
Report on Finance Department activities of interest – Pak Lin
Ms. Lin asked the Committee to consider two potential changes to past practice. First, Ms. Lin proposed issuing
the Budget Book once every other year instead of annually and including a two-year revenue and spending
budget in the book. Budgeting procedure and analysis will be unchanged including Council, FIC and non-
financial staff participation in the budget process. Ms. Lin estimates one to two man months of Finance staff
time can be saved by making this change. The Committee was supportive of this proposal.
Second, Ms. Lin proposed changing the method of collecting, developing and applying Town incurred costs to
related fees. The purpose of this change is to continue delivering a satisfactory and high quality work product
while saving significant but unmeasured finance staff time. The Town will continue to use an independent
consultant to guide and assist with development of appropriate allocable costs and methods by using a detailed
financial model as in the past. New model development will be open to FIC members to identify and assist
with the resolution of allocation methods. The new method is expected to result in more equitable allocations
and reduce time-consuming mid and end of year analysis. The consultant will consider implementing a method
to: a) use concurrent time keeping of billable town staff labor input and b) develop overhead rates to be applied
to actual labor hours incurred to develop allocable costs related to billings. The Committee was generally
supportive of undertaking the changes subject to further evaluation as the new process is formalized.
Review of future meeting calendar:
The next FIC meeting will be a Regular meeting on March 5, 2018 to: 1) Consider and review Town policy for
a Section 115 Trust with representatives of PARS and High Mark Capital in attendance, and 2) Consider
changes to the OPEB Trust investment policy with representatives in attendance of CalPERS CERBT group
who manage this trust for the Town. Other topics for future meetings include: Workers Comp. provider change;
Review of long term capital plans and related policies; 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 5:45 pm, there were no further matters to be discussed and the meeting adjourned.
Respectfully submitted by Roddy Sloss, Committee Secretary