CC SR 20160906 D - FY16-17 FAC Work PlanRANCHO PALOS VERDES CITY COUNCIL
AGENDA REPORT
AGENDA DESCRIPTION:
MEETING DATE: 09/06/2016
AGENDA HEADING: Consent Calendar
Consideration and possible action to approve the proposed FY16-17 Finance Advisory
Committee Work Plan.
RECOMMENDED COUNCIL ACTION:
(1) Approve the proposed FY16-17 Finance Advisory Committee Work Plan.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Trang Nguyen, Deputy Director of Finance
REVIEWED BY: Deborah Cullen, Director of Finance
APPROVED BY: Doug Willmore, City Manager,/` "?
ATTACHED SUPPORTING DOCUMENTS:
A. Proposed FY16-17 Finance Advisory Committee Work Plan (page A-1)
B. Resolution No. 2008-64 (page B-1)
BACKGROUND AND DISCUSSION:
The Finance Advisory Committee (FAC) has been appointed to provide citizen input
regarding the 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 (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 or
allocation of resources, as such actions can be in conflict with the City Council's role in
setting priorities.
The proposed FY16-17 FAC work plan includes the following assignments:
1
1. Review and provide feedback/recommendations regarding Committee proposed
work plan — new recurring task
2. Receive the City's year-end unaudited actuals — new recurring task
3. Receive Comprehensive Annual Financial Report (CAFR) — recurring task
4. Review Five -Year Financial Model — recurring task
5. Receive Mid -Year Financial Report— new recurring task
6. Study Employee Pension Plan — recurring task
7. Review Quarterly Investment Activities and Treasury Report — new recurring task
8. Study Infrastructure Funding Alternatives — recurring task
The estimated Staff time to support the FY16-17 FAC work plan is expected to be about
141 hours, which is an increase of 48 hours as compared to prior years' allocations of
Staff resources. The increase is due to 4 additional recurring tasks added to the work
plan. The majority of the increase in hours is due to the quarterly review of investment
activities and treasury report, which is estimated at 36 hours. The remaining 12 hours
are for the preparation of the work plan, and the mid -year and year-end reviews. These
are tasks that were completed in FY15-16 but were not included in the work plan for the
last fiscal year.
The FAC reviewed and approved the proposed FY16-17 work plan on August 18, 2016.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available
for the City Council's consideration:
1. Modify the proposed FY16-17 FAC work plan, or request that the
Committee make revisions and resubmit.
2. Take other action as deemed appropriate by the City Council.
2
Attachment A
OT1' OF I�wHO PALOS VERSES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 1 of 11
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 2016-17 ASSIGNMENTS
1. Review and provide feedback/recommendations regarding FY 2016-17 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 mid -year review for FY 2016-17, budget
assumptions and proposed budget for FY 2017-18;
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;
7. Review Treasury activities and investment report quarterly;
8. 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
9. 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.
A-1
Attachment A
CITY OF �+J`ICHO PALOS IIERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 2 of 11
SUMMARY OF STAFF TIME
A summary of the total Staff time estimated for the assignments outlined in this 2016-17
work plan follows:
Note: The Staff time estimated herein is exclusive of the time to prepare work product
for the City Council.
A-2
Potential
Staff
Support
Assignment
No.
Meeting Date
Hours
FY 2016-17 Work Plan
1
August
11
Year-end Review
2
October
11
Review CAFR
3
January
13
5 -Year Model
4
April/May
19
FY 2016-17 Mid -year Review, FY
2017-18 Budget Assumptions &
Preliminary Budget
5
March
24
Pension Plan
6
February
15
Review Investment Activities
Quarterly
7
August, October,
January and April
36
Infrastructure Funding
8
April/May
12
Total Staff Time
141
Note: The Staff time estimated herein is exclusive of the time to prepare work product
for the City Council.
A-2
Attachment A
OT1' OF I�wHO PALOS VERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 3 of 11
SPECIFIC 2016-17 ASSIGNMENTS
1. REVIEW AND PROVIDE FEEDBACK/RECOMMENDATIONS REGARDING FY
2016-17 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 August
2016 along with the first quarterly review of investment activities and
treasury report.
Rtaff Tima-
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.
A-3
Attachment A
OT1' OF I�wHO PALOS VERSES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 4 of 11
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 October
2016.
.,taff Tima-
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
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
2017.
i
OT1' OF I�wHO PALOS VERSES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 5 of 11
.,teff Tima-
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
Attachment A
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 2018 Model prepared by Staff focusing
on noteworthy changes, trends, and key assumptions; and
Provide recommendations to City Council.
Staff Responsibilities:
Prepare the draft 2018 Model with accompanying staff reports explaining
key assumptions and noteworthy changes;
➢ Present an oral overview of the draft 2018 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 FY17-18 City budget.
A-5
Attachment A
OT1' OF I�wHO PALOS VERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 6 of 11
Timeline:
Staff expects that review of the draft 2018 Model will take place at two
Committee meetings during April/May 2017 along with infrastructure funding.
.qtaff Tima-
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 2016-17 MID -YEAR REVIEW, FY 2017-18
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.
Committee Responsibilities:
Review and comment on FY 2016-17 mid -year review; and
Review and comment on FY 2017-18 budget assumptions and proposed
budget.
Staff Responsibilities:
➢ Provide a presentation of the City's financial position at the end of
December 31, 2016, the budget assumptions and proposed budget for FY
2017-18 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
2017.
Staff Time:
Staff preparation of meeting agenda 1 hour
w o
Attachment A
OT1' OF I�wHO PALOS VERSES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 7 of 11
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 employee pension 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, 2014, CalPERS Actuarial Valuation Report (to be
received by November 2015); and
Prepare an updated FAC Memorandum with additional recommendations
to the City Council, as appropriate.
Staff Responsibilities:
y Provide a presentation of the June 30, 2014, CalPERS Actuarial Valuation
Report and information relevant to this assignment, and answer Committee
Member questions; and
➢ Forward the Committee's updated Memorandum to the City Council, if
applicable.
A-7
Attachment A
OT1' OF I�wHO PALOS VERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 8 of 11
1011 WITH
Staff expects this assignment can be completed during two meetings in
February 2017.
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 the quarter ending June 30th in
August 2016. The quarter ending September 30th will be presented in October
2016, the quarter ending December 31St in January 2017, and the quarter
ending March 31St in April 2017.
•
OT1' OF I�wHO PALOS VERSES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 9 of 11
.,teff Tima-
Staff preparation of 4 meeting agendas
Staff preparation of 4 meeting minutes
Staff report preparation for 4 meetings
Meeting attendance for 2 staff members
at 4 meetings
Total Staff Time Required
Attachment A
4 hours
8 hours
8 hours
16 hours
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, April/May 2017.
two
CITY OF �PJ`ICHO PALOS 1]ERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 10 of 11
Staff Time:
Staff preparation of meeting agenda
Staff preparation of meeting minute
Staff report presentation for Committee
Staff preparation for presentation
Meetina attendance for 2 staff members
Total Staff Time Required
COMMITTEE RESOURCES
Budget
Attachment A
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.
A-10
Attachment A
CITY OF �PJ`ICHO PALOS 1]ERDES
FINANCE ADVISORY COMMITTEE 2016-17 WORK PLAN
Page 11 of 11
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 positive working relationship with the Chair and committee members.
A-11
RESOLUTION NO. 2008-64
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF RANCHO PALOS VERDES ESTABLISHING THE
FINANCE ADVISORY COMMITTEE'S MISSION
STATEMENT, SIZE OF MEMBERSHIP AND FREQUENCY
OF MEETINGS.
WHEREAS, on February 19, 2008, the City Council received the 2008
Organization -Wide Assessment Report from Management Partners, which
prompted the City Council to request Staff and the Finance Advisory Committee
to review the Committee's Mission Statement and Work Plan, size of
membership and frequency of meetings for possible adjustments to achieve a
more focused purpose and efficient structure; and,
WHEREAS, on June 12, 2008, the Finance Advisory Committee held a
meeting and took action to forward its recommendations to the City Council; and,
WHEREAS, on July 1, 2008, the City Council received a presentation from
Staff regarding the Committee's Mission Statement and Work Plan, size of
membership and frequency of meetings.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO
PALOS VERDES DOES HEREBY FIND, DETERMINE AND RESOLVE AS
FOLLOWS:
Section 1. Mission Statement: The mission of the Finance Advisory
Con'mittce shall be to provide citizen input to the City Council 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 advise on 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.
Section 2. Membership: The Finance Advisory Committee shall consist of
five (5) members.
Section 3. Frequency of Meetings: The Finance Advisory Committee shall
meet on an as needed basis as determined by their annual work plan. They shall
have the ability to cancel any meeting with the consent of the Chair and Staff
liaison.
Section 4. Annual Work Plan: The Finance Advisory Committee and Staff
liaison shall prepare an annual work plan to be presented to the City Council for
approval.
Section 5: Resolution No. 93-113 is hereby rescinded and replaced by this
Resolution.
PASSED, ADOPTED and APPROVED this 15th d July 20
Mayor
Attest:
City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss
CITY OF RANCHO PALOS VERDES )
I, Carla Morreale, City Clerk of The City of Rancho Palos Verdes, hereby
certify that the above Resolution No. 2008-64, was duly and regularly passed
and adopted by the said City Council at regular meeting thereof held on July '15,
2008.
City Clerk
Resolution No. 2008-64
Page 2 of 2
B-2