HomeMy WebLinkAboutSeptember 9Town of Los Altos Hills
F&I Committee, Town Hall, Wednesday, Sept 9 2019
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Finance and Investment Committee Special Meeting
Members Present Allan Epstein, Kjell Karlsson, Susan Mason, Chris Nam, Bill Silver, Roddy Sloss,
Chris Welborn
Members Absent Stanley Mok, Betty Kayton (resigned as of this meeting)
Associate Members Present Frank Lloyd, Medha Rishi
Council Present Roger Spreen, Mayor. Michelle Wu, Vice Mayor
Staff Present Carl Cahill, City Manager. Sarina Revillar, Administrative Services Director
Guests Present Monique Spyke, Managing Director, PFM. Resident Bridgette Morgan, Matt Goss
CalPERS CERPT Program (5:00 PM)
Approval Mr. Sloss, Chairman, called the meeting to order at 4 pm. The July meeting minutes were
approved by members who attended that meeting.
Agenda Items
1.Medha Nicky Rishi elected Secretary
2.Introduction of Sarina Revillar as Town’s Administrative Services Director
3.PFM Report on updates to Town Investment policy - Monique Spyke, PFM
a.Based on the recommended action by the FIC at its prior meeting, FIC members had
expected only a simple modification to the existing policy changing the Benchmark from 1-
3 years to 1-5 years. Updated investment policy was presented for improved transparency
purposes. Three new investment instruments were recommended:
i.Commercial paper (obligations with 270 days or less, short term corporate)
ii.Supranationals (allowed by CA gov’t code US HQ’d: consists of investment sector
for local agencies and bonds rated AAA, as issued by the World Bank)
iii.Asset backed securities (ABS)
b.Staff decided to review and rewrite the entire investment policy and to add a comparison
table to the State requirements to improve transparency.
i.Members were unsure if the change document reflected changes from latest policy.
Changes included in the proposed new policy included the addition of three
previously excluded instruments as well as limit level changes in some instruments.
ii.Staff agreed to confirm “red line” changes indicated in marked up document are
from the current policy and the committee agreed to review the matter at its next
meeting. Due to the flat yield curve at this time delaying a month would have a
negligible impact on earnings.
c.Decision made to put on agenda for next mtg in Oct and present to Council in Oct
4.Quarterly Investment Portfolio report as of June 31, 2019 - Sarina Revillar, Town
a.A meeting handout included a proposed format for the Quarterly investment report to
Council, and the March 31, 2019 PFM investment report.
Town of Los Altos Hills
F&I Committee, Town Hall, Wednesday, Sept 9 2019
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b.Ms. Revillar plans to present a quarterly investment report to Council after review with the
Committee. The report will address Wells Fargo, LAIF and PFM balances but not OPEB or
Pension Trust balances.
c.In the future, the report will be supplemented with bank balances and anticipated balance
changes.
d.Mr Lloyd expressed past concerns with bad underlying loans associated with ABS and
recommended against including these instruments.
e.In response to a question, Ms. Revillar noted that Staff is considering changing the amount
OPEB funding as the Trust is almost fully funded. Also, Ms. Revillar has contacted an
actuary and will begin planning the OPEB actuarial report for the year ended June 30,
2019.
f.Ms. Spyke presented the PFM quarterly investment report noting that the quarterly income
including market appreciation was $84,775. Portfolio earnings for the quarter on a mark to
market basis were $223,632
5.CalPERS (Cal) Pension Trust - Matt Goss, CalPERS CEPPT Prefunding Program
a.Mr. Goss distributed a new Pension Trust product presentation just released by CalPERS.
The Trust can be used by member agencies to address short term and long-term pension
contribution needs by allowing employers to withdraw funds for any pension related
purposes, including short term needs such as funding normal costs, and longer-term needs
like prepaying unfunded liabilities.
b.Mr. Goss believes this Trust competes favorably with similar products that were available
earlier in the marketplace as measured by fees and expected comparatively short-term
performance.
c.The Trust investment management are the same personnel who manage OPEB Trust
investments for CalPERS.
d.Mr. Sloss commented that Committee’s present focus is on retiring its unfunded pension
liability and in that regard, CalPERS will be issuing its annual actuarial report in the period
between September and November 2019 after which the Committee will consider its
recommendation to Council for the next contribution to retire its Unfunded Pension
Liability.
6.Date of next meeting
a.October 7, 2019
7.Council meeting updates
a.Pathway Fee Study would be on September Council agenda.
Presentations from floor
8.None
Adjournment At approximately 6:00 pm
Respectfully submitted: Medha Nicky Rishi, Committee Secretary