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TOWN OF ATHERTON FINANCE COMMITTEE AGENDA APRIL 9, 2013 2:00 PM TOWN COUNCIL CHAMBERS

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ROLL CALL Elizabeth Lewis, Jerry Carlson, Greg Conlon, Alain Enthoven, Jim Massey, Diane Beymer- Sandhu, Bob Polito

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PUBLIC COMMENTS NONE

REGULAR AGENDA 3. APPROVE MINUTES OF MARCH 7TH, 2012 FINANCE COMMITTEE MEETING [APPROVED] 4. REVIEW OF NICOLAY CONSULTING OPEB ACTUARIAL NEW ASSUMPTIONS Part 1 - http://www.youtube.com/watch?v=a0s5lYkkAhQ#t=2m24s Part 2 - http://www.youtube.com/watch?v=eVLiMJZGLnE Part 3 - http://www.youtube.com/watch?v=HfWgXDLcYa4 Revised actuarial study revealed the Town’s costs for retiree healthcare obligations had been significantly reduced due to outsourcing. There are fewer people in the plan. The average age of the workforce had been reduced. PARS insurance rates have been reduced. Annual cost of the plan dropped about $80,000 for the current fiscal year. Annual OPEB cost to the Town is $582,525, down from $640,000. This is about 12% lower than the Town would have had this year had they not done a new valuation. The Finance Director said Atherton’s discount rate of 6% is a middle of the road rate in comparison to other cities. He said the healthcare trend rates were “modest”. He said by being in the middle we’re not being overly aggressive or conservative.

He said Atherton’s unfunded liability for pension was $7 million for safety and $3 million for the miscellaneous plan. The Finance Director says what’s changing is the Town is moving to a cafeteria plan with a cap. Enthoven brings up the medical inflation numbers. Is there a PERS options to close the gap or increase the employee contribution rates? 3) What is an appropriate discount rate? The Finance Director said he believed it would be helpful to discuss these issues with Joe Nation. The Actuary discusses the APOA negotiations. something that is not currently reflected on the balance sheet. The Finance Director said it was $7. The Actuary said that the $6. He said the retiree healthcare liability for most municipalities is 20% funded. He said that the rate should be keyed on Kaiser’s rates. Pension issues.2 million contribution.6 million for retiree medical (after the Town makes a $1. He suggested the Finance Director create an “alternative financial scenario” that considers the unfunded liability.Carlson asked about the unfunded liability for retiree healthcare.3 million with the $1.5 million. He claims it is an unrealistic assumption. He’s currently out of the country. This requirement is being driven by the accounting standards board (GASB). FINANCE DIRECTOR REPORT JOE NATION-PENSION LIABILITY ASSISTANCE CALPERS DISCUSSION http://www.2 million contribution). but would be reduced to $6. He also said that Bartel Associations could help with the decisions. He said this information would help residents better understand the need for additional funding such as the parcel tax. The Actuary said he reviewed the 6-30-11 CalPERS reports. 5. The Actuary suggested that the Committee recommend putting a disclosure in the Town’s financial statement that says the Town must disclose their unfunded pension obligation in their balance sheet next FY and their unfunded retiree healthcare liability in 4 FYs from now.youtube. 1) PERS side fund that will be paid off at the end of this FY.6 million. Carlson recapped that the unfunded obligation was $10 million for pension and $6. The Actuary was instructed to assume the rates would not go up. The total of $10 million is based on 2011 market values. 2) Funding status of the pension based on market value. Both obligations amount to $16. Enthoven explains who Joe Nation is … . The Actuary states that Atherton is 70% funded in their CalPERS pension obligation.6 million is not required to be on Atherton’s balance sheet for another 4 years.com/watch?v=HfWgXDLcYa4#t=6m45s The Finance Director stated that he’s coordinating to have Joe Nation speak.

000 remains in the Parcel Tax fund. the Unassigned Balance of the General Fund balance was $3. The Police Department is short staffed and that’s a driver for the increased costs. The Finance Director mentions a recovery from the contractor from the Fletcher Ridgeview project. Jerry Carlson said they were considering sending the bill to the host homeowner.000 that went into the General Fund in this FY (but. The Auditor said the this was “good” compared to other cities.com/watch?v=_J6YgTY-Sc8 Unrestricted Funds total $6. The Finance Director says that not having the Parcel Tax would have a significant impact upon the Town. not at the Town.1 million.3% of the unassigned fund balance exceeds the required minimum threshold of 20%.http://www.youtube. The Auditor describes the results of the audit. He discussed the Memorandum on Internal Controls and said they found no significant issues. . The Finance Director said that they gathered costs for the Obama visit and submit the bill.3% of the total General Fund expenditures of $11 million.com/watch?v=HfWgXDLcYa4#t=20m30s Part 2 . Library costs will come out of the Town’s reserves and they will no longer be reimbursed to the town. The Town’s tax revenue increased by $621. $875.http://www. This is 30.6. an increase of $685. The Town’s liabilities are $4. This 30. He discloses that the Town’s Representative to the JPA voted to do this.5 million. resulting in net assets of $46 million. The Committee discussed segregation of duties and justified the method they use to provide for internal controls.8 million At the end of FY2012. He said the funds recovered from the contractor were $184. “On the Police side it’s a big issue because as Widmer pointed out …” The Finance Director explained he has been working with the Police Chief regarding the overtime.000 due to increase increases in property taxes. The Town has $50. A discussion about the potential for overtime being a risk area for potential fraud.youtube.000 from the previous fiscal year. REVIEW 2011/2012 AUDITED FINANCIALS -MAZE & ASSOCIATES AND PROVIDE RECOMMENDATION TO CITY COUNCIL Part 1 . Discussion of the Parcel Tax. were paid from the Parcel Tax Fund).4 million in assets. Jerry Carlson discusses the Library Donor Funds and how the Library JPA wants to hold the funds at the County.

AGENDA AND TIME FUTURE AGENDA ITEMS Conlon explained that he didn’t understand the low portion that Atherton receives from property taxes given it high valuation. He took the meeting into a closed session that was not disclosed to the public. there is an approximate 10 minute gap. He said the APOA could “cash out” if they are unable to take the hours. The segment that had not been previously published can be found here: http://www. This may be true for the Management unrepresented group. has a human resources module that the Town owns. He wants this added to a future agenda. the Town restored the unedited video. The Finance Director was excused from the meeting.com/watch?v=_J6YgTY-Sc8#t=24m41s. but has not implemented. The Town’s accounting software. Springbrook. He said the employees would not be able accrue more hours. Conlon brought up the issue of vacations.One of the findings in the auditor’s report had to do with the segregation of duties. but is not true for the APOA. some of which was recorded but not published on the Town’s YouTube site. [ITEM NUMBER SKIPPED] NEXT MEETING DATE. The Finance Director suggested that the APOA was capped at 500 hours. The recording resumed and the Finance Director was summoned back into the meeting. 7. . On 4-17-13. 8. Per the videographer.youtube. Greg Conlon instructed the videographer to stop taping the meeting.

ADJOURN .9.