HomeMy WebLinkAbout9/15/2011 (2)Town of Los Altos Hills
City Council Special Meeting Minutes
Thursday, September 15, 2011
Council Chambers, 26379 Fremont Road, Los Altos Hills, California
CALL TO ORDER, ROLL CALL AND PLEDGE OF ALLEGIANCE (2:10 P.M.)
A. Call to Order
Mayor Summit called the City Council Special Meeting to order at 2:10 p.m. in the
Council Chambers at Town Hall.
Present: Mayor Ginger Summit, Mayor Pro Tem Rich Larsen, Councilmember Jean
Mordo, Councilmember Gary Waldeck
Absent: Councilmember John Radford
Staff. City Manager Carl Cahill, Finance Director Nick Pegueros, City Clerk
Deborah Padovan
B. Pledge of Allegiance
2. PRESENTATIONS FROM THE FLOOR
Persons wishing to address the Council on any subject not on the agenda may do so now. Please complete a Speaker
Card located on the back table of the Council Chambers and submit it to the City Clerk. Comments are limited to two
(2) minutes per speaker. California law prohibits the Council from acting on items that do not appear on the agenda.
Under a Resolution previously adopted by the Council, such items can be referred to staff for appropriate action,
which may include placement on the next available agenda.
There were no presentations from the floor.
3. NEW BUSINESS
A. Resolution Amending the City Council Adopted 2011-12 Budget in the Amount of
$1,224,708.42 to Prepay Lease Agreement #04 -070 -AF Dated September 16, 2004 for
the Construction of the Town Hall Facility and Authorizing the City Manager to
Transmit Payment to the Lender, City National Bank.
The item was presented by Finance Director Nick Pegueros who stated that the Finance
and Investment Committee (FIC) met on Monday, September 12, 2011, and received a
presentation from the investment advisor PFM Asset Management. In that discussion,
PFM was reviewing current market conditions and opportunities for the Town to invest
funds. The current yield on low risk securities is very close to zero and the FIC inquired
about opportunities that save interest if the Town cannot earn interest. One of the areas
of savings identified is the current loan on Town Hall. The loan was taken in 2005 and
the current outstanding balance is $1.3 million dollars with an interest rate of 4.65%.
Based on the analysis conducted by one of the FIC committee members, Roddy Sloss, it
was determined that the Town should consider paying off debt in instances or situations
where the Town does not expect to earn a 5.1 % return on investment. Given the current
market conditions and the outlook at the Federal Reserve level, it does not appear that
City Council Special Meeting Minutes
September 15, 2011
interest rates will rise again soon. The payoff at this point would result in $250,000 in
interest savings, as well as free up the principal payment that was made annually.
Authorization was requested to amend the budget so the Town could pay off the Town
Hall facility by Friday, September 16, 2011. IF the action is not taken at this time, the
next opportunity would be in March 2012.
Council discussion ensued about the urgency of the matter, the Town's current assets and
encumbrances, potential forecasts and emergency situations.
Director Pegueros stated that the Town currently has three loans; one for Town Hall, a
second loan through the CEC for the solar panels and a third with CEC for the solar
panels at Westwind Barn. Further, he stated that the action would take from the
unreserved, undesignated funds which are currently at four million dollars. Additionally,
there is an emergency and operating contingency reserve of $1.6 million, which is held
when needed in the event of an emergency.
City Manager Carl Cahill stated that in the past three to four years, substantial money has
been spent on Parks and Recreation facilities and pathways construction, all of which
were not completely necessary, or avoidable costs. Further, he stated that if this payment
is made, the Town will still have substantial reserves and the amount that would have
been used as a payment could now be returned to savings.
MOTION SECONDED AND CARRIED: Motion by Mordo, seconded by Larsen and
passed unanimously to Approve a Resolution to Amend the City Council Adopted 2011-
12 Budget in the amount of $1,224,708.24 to Prepay Lease Agreement #04 -070 -AF dated
September 16, 2004 for the Construction of the Town Hall Facility and Authorizing the
City Manager to Transmit Payment to the Lender, City National Bank.
4. ADJOURNMENT
There being no further business, the meeting was adjourned by the consensus of the City Council
at 2:30 p.m.
Respectfully submitted,
Deborah Padovan
City Clerk
The minutes of the September 15, 2011 special City Council meeting were approved as presented
at the October 20, 2011 City Council meeting.
2 City Council Special Meeting Minutes
September 15, 2011