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Home My WebLink AboutSeptember 5i I I I 1 1 r I I I I I I i I I N ',:Finance and Investment Committee Special Town of Los Altos Hills Town all, Monday, September 5, 2018 Meeting The' m'- eeti*n'g was called to -order at'4',@.00- pm by. Chairman Sloss. Members present: Allan Epstein, Kjell Karlsson, Betty Kayton, Stan' Roddy Sloss and Chris Welborn Members absent: Susan Mason Associate members present: Jim Lai; -Frank Lloyd Council present: John Radford, Mayor; Roger S'preen, Vice Mayor Staff present: Mok, Chris. Nam, Bill Silver, Kelly Mayes,'Administrator Services Director; Tran' Nguyen, Finance Manager Guests and public present: Izac Chyou, Senior Managing consultant with PFM Asset management LLC; residents and Town Council candidates -George Tyson and avi'ta Tanks Approval of minutes: April '.2., 2018 meeting minutes were approved a's corrected by members who attended that. mee'ting. Introductions -Roddy Sloss Kelly Mayes and Tran Nguyen were introduced and briefly de sct'ibed "'their bsckground. Council candidates av'ita Tanks and George Tyson were introduced and briefly described their background. Council Activities of Interest — John Radford Mr. Radford made a short presentation descn*bing'ani'mtiative by some Council Members to expand existing Town Hall facilities bV approximately 3,000 square feet and rem d vi'niz the Heritage House and Parks and Recreation buildings. A series gather input. of presentations a'r'e pl anned for Cotiricil and interested residents - to describe tentative plans and PFM Presentation on Investment Performance for the quarter'ended June 30, 2018 - Izac Chyou Mr. Chyou made a thirty-five-opage PowerPoint presentation that was included in the materials members received'at, the meeting describing current and. forecast. market conditions , the Town's investment performance for the quarter ended June 30, 2018 and responded to questions from the ConUmttee.'The Town'g'PF M portfolio balance at June 30, 20,18 is $15.3 million at market value substantially unchanged from the March'31, 2018-balanc,e, Generally, PFM believes near term economicconditions are good, and improving- and as. a result believes there wl* 11 -'be continuing interest rate hikes by the FED which should modestly improve the'Town S portfolio performance by favoring Treasuries, selected Agencies, Financials and other strong balance sheet issuers. Results presented are before. PFM fees which are approximately 13 '/z -basis points per quarter. Short term returns offered by LAIF at.. present are slightly better than similar results' from'the CAMP portfolio. The Town has current uninvested cash balances of between $4-$5 million in Wells Fargo Bank. Staff will consider deploying excess bank funds, if any, after considering compensating balance requirements and Town short term needs''. El Continued i M F I 4 I i I 11 • • r f i rr� f, 'Rrrr r r f •� i�r ■ li f !� Y Irl {• t. r k� r Yf ff-}L yY r�•# #r 7' r '� Y a fyy{S 'a i .� + *. �• ;,?tif,� �r.1+4"�! �.r• A�+l��rrL�+�'.i� �� ,�{4�P'+LIy +`rr` ��, ` +J +��V�} �r �`y4,�i •�� ;+1CF • 'I �+ 7`.i •� r•••.I�. • +.�'a ••— 1.1 � r�-r ti'Y�.',� f ■J�'!'• •`Y� � +f"�4 {y+ �lr'�+'. +I Y� r� i 5 �•YY f '�; +ft a�Li ri.. F+�r�'• •�� .. .1, •- ��•, w_ Jr�••� �� L,ti L+� i X55!•+� . 1 •�.r.+ ,"� i 5 tii� i _ _ '+r , j• ...� �. ti � �■�7' X' '.1L rt r ti'tiy� { �� '� iii' w f� 1�',i •.fi•. i•,+• •r 'F•. September 5, 2018 FIC minutes, continue d page 2. Discussion of proposed Reserve Policy. and Unassigned Capital Reserves — Kelly Mayes Ms. Mayes zeferred to handout materials including a cover letter, a proposed policy and related Supplement, and rel ated correspondence between Ms. Mayes and Mr. Sloss on the subject matter. The purposes of the proposed .. a.,..o �,... r;�Fvi»rt Petahliahina anr� rPnnrting tale reserve policy are to: establish an annuai recuinng pivL;Cu�� Ku�.lulyl�•�„ ��-�-�u-----o �---�---r------a --- ToWn'S rPrniirements i.e. liabilities (real and contingent) to be reported in the Town's annual financial statements; and- 2 6 0 provide a framework for evaluating the Town's financial liquidity. Discussion includedappropnateness ot unilzing � y_ __..._.. ,. ,.«.,,�:e,a ..h A r P C V.1"" Pack fixed percentages of excess operational funds to aaJust reserve ievois vGr�u� a ��u.u�u ayYlva�=• ��.��-==b �� reserve based on its needs, progress toward thresholds, available funds, and competing needs. Applicability to ra,,;ra� IPir, ric with Independent fund sources was also discussed,. Vehicle and Equipment Replacement was identified as an area needing 'W further study with sizable reserve need potential. Questions and issues raise y Committee members will result in a second draft of the proposed policy and suvplernent fox. further review and discussion by the Committee later in the calendar year. The Committee note d its appreciarion to Ms. Mayes ox undertaking this effort\on a priority ba sis and complimented her on this initi Finance Department Activities of Interest — Kelly Mayes al work product. Ms. Mayes noted that the Town" s auditors, Maze and Associates.- are on site Performing their fiscal year end audit field work. Ms. Mayes noted that a draft CAFR (annual Town financial report) should be available for the Committee ' s review in its December meeting. Also, Matrix Consulting Group has initiated its field work on an Overhead Cost Allocation and Comprehensive (excluding Sewer) --User Fee Study Which should be available in draft for the Committee review in October 2018. Staff will be offsite next -week attending traimngxonductedy the Town's financial systems vendor, Tyler Technologies. And, Open Gov; a project.imtiated in 2017, is being evaluated comparing its utility to its staff maintenance cost. . Election of Officers for fiscal June 30, 20.19 year- — Roddy Sloss The committee unanimously elected Bill Silver as Chairman, Allan Epstein as Vice Chaixman and Roddy Sloss as Secretary for the current fiscal year. Proposed Investment Policy fox OPES and PARS ne.ction,115 Irust —Roddy Sloss The subject policy, included in meeting handouts, if adopted, will replace a similar policy adopted in January 2018. Mr:comments,Sloss briey described the policy and requested if any, at the next Committee meeting. Review of futureeeting calendar: The Regular FIC meeting scheduled for October 1, 2018 is cancelled. The next FIC meeting will be a Regular meeting on onday, November 5, 2018 at 4 pm at Town Hall. Mr. Sloss distributed a proposed meeting/agenda schedule for the remainder of the June 30, 2019 fiscal year. Other topics for future meetings not include on thethis schedule are: A SecMunty Audit of the Town's electronic data processing controls; a recent Workers Compensation Provi'derchange; Review of long terrneapital plans and related policies; Financial policy -and procedures review; Status of Planning and Building software (Filemaker replacement); Cost Recovery/Cost Allocation Study; review of FIC Monthly Project Summaryort and review of Quarterly Finance Department report on financial controls. Presentations fromthefloore None., Adjournment: At approximately 5-655 pere were no further matters to be discussed and the meeting adjourned. Respectfully submitted by Roddy Sloss, Committee Secretary 11 RL f U + A + h I