HomeMy WebLinkAboutNovember 12F&I committee notes_final
Nov 12, 2020
Finance and Investment Committee Meeting
Members Present Allan Epstein, Medha Rishi, Roddy Sloss, Susan Mason, Chris Welborn, Cheryl Evans, Nathan
Blair, Chris Nam
Members Absent Stan Mok.
Associate Members Present Kjell Karllson, Jim Lai Associate Member Absent Frank Lloyd.
Council Present Michelle Wu, Mayor.
Staff Present Sarina Revillar, Administrative Services Dir. Carl Cahill, City Manager.
Guests Present David Alvey, Maze & Associates.
Public Present: None.
NOTE: This meeting was held via a Zoom online meeting session:
https://us02web.zoom.us/rec/share/eAGbxeAyef7f7BRsKa5fbzJGWeedOxY-HvMwTVknURBnpWPlYCDu0Y
a4HtMFkmNJ.2HGmbARsz0yGrQlb?startTime=1605225412000
Ms. Mason, Chairperson, called the meeting to order at 4:04 pm. Minutes for September 14, 2020 and October 6,
2020 were reviewed. Mr. Sloss requested ballots be attached to the minutes and have clear titles and headers. Ms.
Mason requested October minutes’ headers be corrected with dates and Nathan Blair’s attendance be revised to
“absent”. As amended, minutes were approved unanimously.
Agenda Items
1.Report on June 30, 2020 Comprehensive Annual Financials Statement: David Alvey, Audit Partner
Maze & Associates
a.Town received a clean, unmodified opinion, the highest level of assurance, CAFR still in draft form
with some edits pending.
b.Memorandum on internal controls and material weaknesses, i.e. the “Management Letter”
identified no material weaknesses, no significant deficiencies and no other matters. GASB
pronouncements were pushed back one year due to Covid..
c.Identified prior year material weaknesses and significant deficiencies were addressed by staff and
the auditor found they were implemented and fixed and will drop off the Letter next year..
i.Auditor communicated with the FIC Chair (prior Chair, Roddy Sloss) prior to the audit as
part of SAS99 communication and did additional review and testing to address identified
concerns, in particular with the prior year Sewer Fund accounting.
d.During the Q&A session:
i.Mr. Sloss inquired about pension reporting and measurement date. Mr. Alvey explained
GASB 68 allows the use of the prior year measurement date and would be reviewing Mr,
Sloss’s submitted written questions.
ii.Mr. Alvey and Ms. Revillar confirmed they had not had an opportunity to review all of
the comments submitted by Mr. Epstein prior to the meeting. A discussion of a few of the
questions follow:
1.Five million dollars of additional reserves/restrictions were recorded and as a
result unassigned fund balance went down from the previous year. Mr Alvey
Town of Los Altos Hills
FIC Committee, Remote Zoom meeting,
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agreed it would be appropriate to add a note in the MD&A explaining the
significant change.
2.Department depreciation expenses change significantly year-to-year.. Mr. Alvey
would investigate the cause but depreciation does not affect the general fund or
budgets.
3.Inclusion in MD&A discussion on deviations to budgeted capital spending which
resulted in higher cash balances. Mr. Alvey stated the GFOA has specific
MD&A requirements but also allows discretionary inclusions.
4.Refundable deposit disposition and policy. Audit did extended testing to confirm
detail matched GL balance and status of completion.
5.Ms. Revillar confirmed that Messrs. Epstein’s and Sloss’s questions and
comments will be addressed prior to finalizing the CAFR, which she plans to
place on the November 19, 2020 City Council meeting agenda.
iii.Mr. Sloss gave a heads-up to the committee on the potential change in the proposed
pension capital reserve as a result of the Calpers valuation report.recently received at the
FIC December meeting and that the Council should be alerted. Discussion between staff
and members ensued but due to differing views as to its application to the existing
statements, a disclosure to the Council was not reached. Mayor Wu suggested FIC
collaborate and arrive at a single recommendation for the City Council.
iv.FIC discussed the cause of significant increase in cash position in excess of budget.
Mayor Wu suggested allocating increases in fund balances towards the Town's capital and
infrastructure improvements. Put the available cash to work. Ms. Mason and Mr. Sloss
pointed out the need to understand why projects were not completed last year; review is
undertaken during the mid-year check-in and next year;s budget discussion..
v.The Committee thanked the Staff and Mr. Alvey for their efforts and timely, excellent
results.
Council and Staff Reports on Recent Activity:
2.Report on Finance matters: Ms. Revillar
a.Quarterly PFM, Investment Portfolio Charts
i.Ms. Revillar reviewed the Town’s cash and investments. New investment policy approved
as of October will be implemented as of next quarter.
ii.Committee inquired about Staff’s investment strategy with regard to moving available
funds to PFM.
iii.Discussion of the need for cash flow analysis to guide when funds are transferred between
LAIF and PFM.. Mr. Blair offered to assist in preparing a cash flow analysis that would
help with investment planning.
b.Refundable Deposits: Staff is down to 339 projects/406k. The goal is for it to be completed by next
council meeting in December (down from 1400 projects/$2.2M which had the starting date prior to
2017).
3.Report on Council Matters: Mayor Wu:
Town of Los Altos Hills
FIC Committee, Remote Zoom meeting,
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a.Town is in excellent financial shape and reiterated her desire to see the funds expended to improve
the quality of life in Town. The Committee thanked her for the excellent work during her Council
Future Meeting Topics
a.Next meeting scheduled for Dec 7, 2020
i.December agenda: CalPERS pension review with Doug Pryor, Refund of excess overhead
allocation to Sewer Fund, Cash management proposal (TBD), Greenwaste updates (TBD).
Future meeting insurance review and earthquake insurance.
Adjournment At approximately 5:35 pm, there being no further matters to be discussed the meeting adjourned.
Respectfully submitted: Medha Nicky Rishi, Committee Secretary