CC SR 20171205 O - FAC Work PlanRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 12/05/2017
AGENDA HEADING: Consent Calendar
Consideration and possible action for the City to approve the proposed FY17-18
Finance Advisory Committee Work Plan.
RECOMMENDED COUNCIL ACTION:
(1) Approve the proposed FY17-18 Finance Advisory Committee Work Plan.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Deborah Cullen, Director of Finance
REVIEWED BY: Same as above
APPROVED BY: Doug Willmore, City ManagerVr10-
ATTACHED SUPPORTING DOCUMENTS: ✓"'�
A. Proposed FY17-18 Finance Advisory Committee Work Plan
BACKGROUND AND DISCUSSION:
The Finance Advisory Committee (FAC) has been appointed to provide citizen input
regarding financial matters of the City. The City Council's fiduciary responsibility cannot
be delegated; and includes review and adoption of financial policies, models and the
annual budget.
The City Council allocates significant Staff and budget resources to support its advisory
bodies. To help control the use of these resources and avoid "scope creep", the FAC's
establishing Resolution No. 2008-64 (Attachment B) requires preparation of an annual
work plan to be approved by the City Council. The work plan outlines tasks assigned,
and identifies resources allocated to the advisory body. Advisory bodies do not direct
Staff effort and allocation of resources; as such actions can be in conflict with the City
Council's role in setting priorities.
Please note that a new item (No. 6) is added to the work plan to attend all Portuguese
Bend Land Flow Subcommittee meetings and review/support activities related to this
project as directed by City Council. The proposed FY17-2018 work plan includes the
following assignments:
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1) Review and provide feedback/recommendations regarding FY17-18 Finance
Advisory Committee Work Plan;
2) Receive a presentation on the City's year-end review presentation and make
recommendations for excess/deficit unrestricted fund balance;
3) Receive a presentation of the City's Comprehensive Annual Financial Report
(CAFR) prepared annually, including the audit report;
4) Review and provide feedback/recommendations regarding the Five -Year
Financial Model to the City Council;
5) Receive a presentation on the midyear review for FY17-18, budget assumptions
and proposed budget for FY18-19;
6) City Council requested that each Committee designate 1 member to attend the
Portuguese Bend Land Flow Subcommittee meetings and provide support, as
desired by City Staff or City Council.
7) Receive a presentation of the City's annual employee pension plan actuarial
valuation reports, continue to monitor changes to pension plan provider
assumptions and methodologies, and make recommendations to the City
Council when appropriate;
8) Review Treasury activities and investment report quarterly;
9) Study infrastructure funding alternatives in conjunction with the development of
an Infrastructure Management Plan and recommendations from the
Infrastructure Management Advisory Committee, and make recommendations to
the City Council; and
10) In addition to the above specific assignments, on an as -needed basis, the FAC
is prepared to review any additional projects assigned by the City Council.
The estimated staff time to support the FY17-18 work plan is estimated to be about 141
hours. This is the same number of hours that were approved in FY16-17. The FAC
reviewed and approved the proposed FY17-18 work plan on October 24, 2017.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative action is available for
the City Council's consideration:
Direct Staff and the FAC to revise the proposed work plan for FY17-18 for
City Council approval at a future meeting.
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FINANCE ADVISORY COMMITTEE 2017-18 WORK PLAN
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MISSION STATEMENT
The Finance Advisory Committee provides citizen input to the City Council and
Staff regarding financial matters of the City of Rancho Palos Verdes. The Committee
shall review short and long-term financial information of the City and other financial
issues as assigned by the City Council. The Committee shall provide advice regarding
economic development matters such as methods to improve the business climate and
how to better work with local businesses and shall recommend specific areas for review
to the City Council. The Committee will serve to advise the City Council regarding the
City's financial condition.
SUMMARY OF SPECIFIC 2017-18 ASSIGNMENTS
1. Review and provide feedback/recommendations regarding FY 2017-18 Finance
Advisory Committee Work Plan;
2. Receive a presentation on the City's year-end review presentation and make
recommendations for excess/deficit unrestricted fund balance;
3. Receive a presentation of the City's Comprehensive Annual Financial Report
(CAFR) prepared annually, including the audit report;
4. Review and provide feedback/recommendations regarding the Five -Year
Financial Model to the City Council;
5. Receive a presentation on the midyear review for FY 2017-18, budget
assumptions and proposed budget for FY 2018-19;
6. City Council requested that each Committee designate 1 member to attend the
Portuguese Bend Land Flow Subcommittee meetings and provide support, as
desired by City Staff or City Council.
7. Receive a presentation of the City's annual employee pension plan actuarial
valuation reports, continue to monitor changes to pension plan provider
assumptions and methodologies, and make recommendations to the City Council
when appropriate;
8. Review Treasury activities and investment report quarterly;
9. Study infrastructure funding alternatives in conjunction with the development of
an Infrastructure Management Plan and recommendations from the Infrastructure
Management Advisory Committee, and make recommendations to the City
Council; and
10. In addition to the above specific assignments, on an as -needed basis, the FAC is
prepared to review any additional projects assigned by the City Council.
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FINANCE ADVISORY COMMITTEE 2017-18 WORK PLAN
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SUMMARY OF STAFF TIME
A summary of the total Staff time estimated for the assignments outlined in this 2017-18
work plan follows:
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Note: The Staff time estimated herein is exclusive of the time to prepare work product
for the City Council.
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Potential
Staff
Support
Assignment
No. Meeting Date
Hours
FY 2017-18 Work Plan
1 October
11
Year-end Review
2 December
11
Review CAFR
3 January/February
13
5 -Year Model
4 March/April
19
FY 2016-17 Mid -year Review, FY
2017-18 Budget Assumptions &
Preliminary Budget
5 March
24
Pension Plan
7 February
15
Review Investment Activities
Quarterly
8 _ August, October, January
and April
36
Infrastructure Funding
March/April
12
Total Staff Time
141
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Note: The Staff time estimated herein is exclusive of the time to prepare work product
for the City Council.
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FINANCE ADVISORY COMMITTEE 2017-18 WORK PLAN
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SPECIFIC 2017-18 ASSIGNMENTS
1. REVIEW AND PROVIDE FEEDBACK/RECOMMENDATIONS REGARDING FY
2017-18 FINANCE ADVISORY COMMITTEE WORK PLAN
Finance Advisory Committee Work Plan is a document that summarized what
Committee Member will be working on during the fiscal year with the Director of
Finance.
Staff Responsibilities:
➢ Prepare a draft work plan for Committee Members to review and provide
feedback/recommendations; and
➢ Present the final Work Plan to City Council.
Timeline:
➢ Staff expects that this presentation will take place at a meeting in October
2017 along with the first quarterly review of investment activities and
treasury report.
Staff Time:
Staff preparation of meeting agenda 1 hour
Staff preparation of meeting minute 1 hour
Staff report preparation of work plan 5 hours
Meeting attendance for 2 staff members 4 hours
Total Staff Time Required 11 hours
2. RECEIVE A PRESENTATION OF THE CITY'S YEAR-END REVIEW
PRESENTATION AND MAKE RECOMMENDATIONS FOR EXCESS/DEFICIT
UNRESTRICTED FUND BALANCE
The year-end financial review is an exercise that Finance performs after closing
is completed. In this process, Finance calculates the City's fund balance based
on the unaudited actuals and compares the fund balance to what was reported
as the year-end estimate and fund balance during the budget adoption.
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Staff Responsibilities:
Present the unaudited actuals to the Committee and answer Committee
Member questions.
Present an analysis of year-end estimates and fund balance during the
budget adoption process to the unaudited actuals to the Committee and
answer Committee Member questions.
Timeline:
Staff expects that this presentation will take place at a meeting in
December 2017.
Staff Time:
Staff preparation of meeting agenda 1 hour
Staff preparation of meeting minute 1 hour
Staff preparation of presentation 1 hour
Staff report preparation for year-end analysis r 4 hours
Meeting attendance for 2 staff members 4 hours
Total Staff Time Required 11 hours
3. RECEIVE A PRESENTATION OF THE CITY'S COMPREHENSIVE ANNUAL
FINANCIAL REPORT (CAFR) PREPARED ANNUALLY, INCLUDING THE
AUDIT REPORT
The Comprehensive Annual Financial Report (CAFR) is an annual report that
includes the City's audited financial statements, as well as other financial and
statistical information. Receipt of this presentation is an annually recurring item
intended to provide the Committee with relevant financial information.
Staff Responsibilities:
Present an oral overview of the CAFR and accompanying staff report to the
Committee and answer Committee Member questions.
Timeline:
Staff expects that this presentation will take place during a meeting in
January/February 2018.
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Staff preparation of meeting agenda
Staff preparation of meeting minute
Staff report preparation for the Committee
Staff preparation for presentation
Meeting attendance for 2 staff members
Total Staff Time Required
1 hour
2 hours
5 hours
1 hour
4 hours
13 hours
4. REVIEW AND PROVIDE COMMENTS AND RECOMMENDATIONS
REGARDING THE FIVE-YEAR FINANCIAL MODEL TO THE CITY COUNCIL
The Five -Year Financial Model (the "Model") is a financial schedule which is
annually prepared by Staff, as required by City Council Policy No. 18. The
Model includes the proposed budget for the coming fiscal year, as well as
estimates of revenues, expenditures, fund transfers and ending fund balance
for all funds of the City over a five-year time period. The Model is prepared
as part of the budget process for each fiscal year, and is a planning tool used
to identify structural problems in the budget and future fiscal challenges.
Committee Responsibilities:
Review and comment on the draft 2019 Model prepared by Staff focusing
on noteworthy changes, trends, and key assumptions; and
Provide recommendations to City Council.
Staff Responsibilities:
Prepare the draft 2019 Model with accompanying staff reports explaining
key assumptions and noteworthy changes;
Present an oral overview of the draft 2019 Model and accompanying staff
report to the Committee and answer Committee Member questions; and
Forward the Committee's comments and recommendations to the City
Council for its consideration prior to adoption of the FY18-19 City budget.
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Timeline:
Staff expects that review of the draft 2019 Model will take place at two
Committee meetings during March/April 2018 along with infrastructure
funding.
Staff Time:
Staff preparation of meeting agenda 1 hour
Staff preparation of meeting minute 2 hours
Staff report preparation for the Committee 10 hours
Meeting attendance for 3 staff members 6 hours
Total Staff Time Required 19 hours
5. RECEIVE A PRESENTATION OF FY 2017-18 MID -YEAR REVIEW, FY 2018-19
BUDGET ASSUMPTIONS AND PROPOSED BUDGET
Mid -year review is a financial analysis performed after the first six months of
the fiscal year comparing budget to actuals. This is the first look at where we
expect to end the fiscal year. Budget assumptions and proposed budget are
prepared and presented to Council during the budget workshop, an informal
meeting between Council and department heads, as they review the City's
financial position for the upcoming fiscal year.
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Committee Responsibilities:
➢ Review and comment on FY 2017-18 mid -year review; and
Review and comment on FY 2018-19 budget assumptions and proposed
budget.
Staff Responsibilities:
Provide a presentation of the City's financial position at the end of
December 31, 2017, the budget assumptions and proposed budget for FY
2018-19 and answer Committee Member questions; and
Forward the Committee's comments to City Council, if applicable.
Timeline:
Staff expects this assignment can be completed during a meeting in March
2018.
Staff Time:
w o
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Staff preparation of meeting agenda
1 hour
Staff preparation of meeting minute
2 hours
Preparation of mid -year review and budget assumptions
10 hours
Staff preparation for presentation
5 hours
Meeting attendance for 3 staff members
6 hours
Total Staff Time Required
24 hours
6. RECEIVE A PRESENTATION OF THE CITY'S ANNUAL EMPLOYEE
PENSION PLAN ACTUARIAL VALUATION REPORTS, CONTINUE TO
MONITOR CHANGES TO PENSION PLAN PROVIDER ASSUMPTIONS AND
METHODOLOGIES, AND MAKE RECOMMENDATIONS TO THE CITY
COUNCIL WHEN APPROPRIATE
For the last 5 years, the FAC has studied the City's employeTpension plan,
and issued Memorandums with recommendations to the City Council.
The FAC will continue to study factors impacting the City's employee pension
plan, and provide recommendations to the City Council as appropriate.
Committee Responsibilities:
Review the June 30, 2015 CalPERS Actuarial Valuation Report (to be
received by November 2016); and
➢ Prepare an updated FAC Memorandum with additional recommendations
to the City Council, as appropriate.
Staff Responsibilities:
Provide a presentation of the June
Report and information relevant
Committee Member questions; and
➢ Forward the Committee's updated
applicable.
30, 2015 CalPERS Actuarial Valuation
to this assignment, and answer
Memorandum to the City Council, if
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FINANCE ADVISORY COMMITTEE 2017-18 WORK PLAN
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itMti 2
Staff expects this assignment can be completed during two meetings in
February 2018.
Staff Time:
Staff preparation of meeting agenda
1 hour
Staff preparation of meeting minute
2 hours
Staff report preparation for the Committee
5 hours
Staff preparation for presentation
3 hours
Meeting attendance for 2 staff members
4 hours
Total Staff Time Required
15 hours
7. REVIEW TREASURY ACTIVITIES AND INVESTMENT REPORTS
On March 15, 2016, the City Council approved a custodian agreement with
Vining Sparks to provide brokerage services to enable investment
diversification of the City's portfolio. The City started to invest in CD's late
April of 2016.
Committee Responsibilities:
➢ Review current investments and treasury report.
Staff Responsibilities:
➢ Prepare and present current investment portfolio and Treasury Report to
Committee.
Timeline:
Staff expects to bring the Treasury Report and investment activities to the
Committee quarterly with the first review for quarter ending June 30th on
August 2017. Then quarter ending September 30th on October 2017, quarter
ending December 31St on January 2018 and quarter ending March 31St in
April 2018.
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Staff preparation of 4 meeting agendas 4 hours
Staff preparation of 4 meeting minutes 8 hours
Staff report preparation for 4 meetings 8 hours
Meeting attendance for 2 staff members at 4 meetings 16 hours
Total Staff Time Required 36 hours
8. SUBJECT TO CITY COUNCIL DIRECTION, STUDY INFRASTRUCTURE
FUNDING ALTERNATIVES IN CONJUNCTION WITH THE INFRASTRUCTURE
MANAGEMENT PLANNING TOOL, AND MAKE RECOMMENDATIONS TO
THE CITY COUNCIL
The City is currently in process of developing an Infrastructure Management
Planning Tool, with input from the Infrastructure Management Advisory
Committee established by the City Council in 2014. In conjunction with the
planning effort, the City Council may direct the FAC to study infrastructure
funding alternatives, and make recommendations accordingly.
Committee Responsibilities:
Review alternatives for funding the City's infrastructure; and
Prepare comments and recommendations to be forwarded to the City
Council, as appropriate.
Staff Responsibilities:
Present available alternatives for funding
answer Committee Member questions; and
➢ Forward the Committee's comments and
Council, if applicable.
Timeline:
the City's infrastructure, and
recommendations to the City
Staff expects that study of infrastructure funding alternatives be presented at
the same time as the five-year model, March/April 2018.
two
CITY OF IAI`ICH(3 PALCS I/RDES
FINANCE ADVISORY COMMITTEE 2017-18 WORK PLAN
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Staff Time:
Staff preparation of meeting agenda
Staff preparation of meeting minute
Staff report presentation for Committee
Staff preparation for presentation
Meeting attendance for 2 staff members
Total Staff Time Required
COMMITTEE RESOURCES
Budget
1 hour
2 hours
4 hours
1 hours
4 hours
12 hours
Historically, the City's budget has included an allocation for hiring outside consultants to
assist in researching particular issues. Although this draft work plan does not include
assignments with an apparent need for consulting help, additional assignments may
come from the City Council in the future. Staff believes the City's budget is adequate to
meet the needs of the Committee.
ROLES
City Council
The five -member City Council is the legislative and policy making body for the City,
charged with providing overall leadership by enacting laws and allocating City resources
for programs, services and activities. The City Council appoints members to serve on
this committee and makes special assignments to research, discuss, and provide
comments and recommendations to the Council.
Finance Advisory Committee
Advisory committees are a structured way for individual citizens to share their opinions
and perspectives, and to formulate comments and recommendations in a focused, small
group structure. The primary purpose of advisory committees is to provide judicious
advice, from a citizen perspective, to the City Council. Committee activities may include
the study of critical issues, hearing public testimony, and reviewing staff reports and
recommendations — all of which is intended so that the committee is prepared to
discuss, formulate, and forward well-developed, thoughtful comments and
recommendations to the City Council in a timely manner. All appointees to the
Committee should act at the direction of the whole or the majority of the City Council
and not upon the request or direction of an individual member of the Council.
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Staff
Staff liaisons have been assigned to each Committee to maintain communication
between the Committee, City Council and City Management. Staff works under the
direction of the City Manager. Reports prepared by Staff are generally for the ultimate
review and action of the City Council subsequent to the Committee's review and
comment. Staff is responsible for the work product that the Committee reviews and
administration of the Committee's activities including, but not limited to the following:
• Ensuring that meeting notifications and consistent recordkeeping occurs.
• Serving as a communication link between the Committee, City Management,
departments, and the City Council, as appropriate.
• Providing professional guidance, issue analysis and recommendations.
• Assisting the committee with report preparation, and correspondence in keeping
with the committee's Council -approved work plan.
• Making sure the intent of the advisory committee is not lost after the Committee
acts to make a comment or recommendation, and that it is conveyed accurately
to the City Council in a timely manner.
• Assisting the advisory committee in staying focused on the assignment and
agenda.
• Ensuring compliance of the Committee's actions with the Brown Act.
• Presenting advisory committee comments and recommendations to the City
Council, if requested to do so by either the committee or the City Council.
• Maintaining a posi ive working relationship with the Chair and committee
members.
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