RPVCCA_CC_SR_2014_08_19_C_FAC_Advisory_Commitee_Proposed_Work_PlanCrrYOF RANCHO PALOS VERDES
MEMORANDUM
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
Project Manager:
HONORABLE MAYOR & CITY COUNCIL MEiRS
DENNIS McLEAN, DIRECTOR OF FINANCE
AUGUST 19, 2014
FINANCE ADVISORY COMMITTEE PROPOSED 2014-
15 WORK PLAN
CAROLYNN PETRU, ACTING CITY MANAGE~
Kathryn Downs, Deputy Director of Finance i{J!)
RECOMMENDATION
Approve the proposed 2014-15 Work Plan forthe Finance Advisory Committee (FAC) (see
Attachment A).
DISCUSSION
The 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. 2008-064, see Attachment 8) 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 and City Manager's role in setting priorities.
The proposed 2014-15 Work Plan for the FAC includes the following assignments:
1. Receive Comprehensive Annual Financial Report
2. Review Five-Year Financial Model
3. Study Employee Pension Plan
4. Review Draft Debt Policy
5. Review Fiscal Impact of Storm Drain User Fee Extension -Only if and when
directed by the City Council
6. Study Infrastructure Funding Alternatives
C-1
FINANCE ADVISORY COMMITTEE PROPOSED 2014-15 WORK PLAN
August 19, 2014
Page 2 of 2
The estimated Staff time to support the 2014-15 FAC assignments is estimated to be about
89 hours, which is consistent with prior year allocations of Staff resources.
The FAC reviewed and approved the draft 2014-15 Work Plan on August 6, 2014.
Attachments:
A -Proposed Finance Advisory Committee 2014-15 Work Plan
B -Resolution No. 2008-064, 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
C-2
Attachment A
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 2014-15 ASSIGNMENTS
1. Receive a presentation of the City's Comprehensive Annual Financial
Report (CAFR) prepared annually, including the audit report;
2. Review and provide comments and recommendations regarding the Five-
Year Financial Model to the City Council;
3. 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;
4. Review a draft Debt Policy for the City, and make recommendations to the
City Council;
5. Subject to City Council direction, review the fiscal impact of any proposal
to extend the storm drain user fee, and make recommendations to the City
Council; and
6. 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;
7. 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.
C-3
Attachment A
SUMMARY OF STAFF TIME
A summary of the total Staff time estimated for the assignments outlined in this
2014-15 work plan follows:
Assignment
·Debt P.oucy ...
Pension Plan
Receiw CAFR
' "' ' ' ~ 'c ~,
2015 Fiw-Year Model
; ""' '''' ''~"''"''•"~=me "' '"" ' uu=~m••_,'
: Storm Drain User Fee Extension
: Infrastructure Funding
Total Staff Time
No.
4
3
1
Potential
~eetir1~ Date ....
October
c.,,.,,,,,,,,,,,,,,,w,.,,,,,,,,,,,
, [)ecember/January
January ..
2 April/May
s To· be detemiTneci
6 June
Staff Suf:>port
Hours
8
21
2
19
27
12
89
Note: The Staff time estimated herein is exclusive of the time to prepare work
product for the City Council.
C-4
Attachment A
SPECIFIC 2014-15 ASSIGNMENTS
1. 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 with another
Work Plan assignment in January 2015.
Staff Time:
Committee Member Advance Q&A
Staff preparation for presentation
Total Staff Time Required
1 hour
1 hour
2 hours
2. 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 2015 Model prepared by Staff focusing
on noteworthy changes, trends, and key assumptions; and
~ Provide recommendations to City Council.
C-5
Attachment A
Staff Responsibilities:
~ Prepare the draft 2015 Model with accompanying staff reports explaining
key assumptions and noteworthy changes;
~ Present an oral overview of the draft 2015 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 FY15-16 City budget.
Time line
Staff expects that review of the draft 2015 Model will take place at two
Committee meetings during April and/or May 2015.
Staff Time:
Staff report preparation for the Committee
Agenda preparation with Chair & distribution
Committee Member Advance Q&A
Staff preparation for presentation
Meeting attendance for 1 staff person
Minute preparation
Total Staff Time Required
6 hours
2 hours
2 hours
3 hours
4 hours
2 hours
19 hours
3. 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 3 years, the FAC has studied the City's employee pension plan; and
issued Memorandums with recommendations to the City Council dated April 25,
2012, March 6, 2013, and December 11, 2013.
In light of new financial reporting standards for pension plans and recent changes
in assumptions and methodologies used by the California Public Employees
Retirement System (CalPERS), the FAC will continue to study factors impacting
the City's employee pension plan, including a potential pay-down of the City's
unfunded liability, and provide recommendations to the City Council as
appropriate.
C-6
Attachment A
Committee Responsibilities:
> Review the June 30, 2013 CalPERS Actuarial Valuation Report (to be
received by November 2014); and > Prepare an updated FAC Memorandum with additional recommendations
to the City Council, as appropriate.
Staff Responsibilities:
> Provide a presentation of the June 30, 2013 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.
Timeline
Staff expects this assignment can be completed during two meetings in
December 2014 and January 2015.
Staff Time:
Staff report preparation for the Committee
Agenda preparation with Chair & distribution
Committee Member Advance Q&A
Staff preparation for presentation
Meeting attendance for 1 staff person
Minute preparation
Distribute FAC Memorandum to City Council
Total Staff Time Required
6 hours
2 hours
3 hours
3 hours
4 hours
2 hours
1 hour
21 hours
4. REVIEW A DRAFT DEBT POLICY FOR THE CITY, AND MAKE
RECOMMENDATIONS TO THE CITY COUNCIL
On February 26, 2014, the FAC received a presentation from the City's Financial
Advisor, Tim Schaefer of Magis Advisors; which included a recommendation that
the City establish a Debt Policy to outline the parameters of when and how the
City would consider the use of debt. In its Memorandum dated March 5, 2014
regarding San Ramon Canyon Stabilization project funding, the FAC made the
following comment:
"We agree with the City's outside financial advisor that 'making a decision
to borrow money is almost always better informed by reference to a policy
and a plan than to the needs of a particular transaction."'
C-7
Attachment A
Committee Responsibilities:
~ Review the draft Debt Policy; and
~ Prepare a FAC Memorandum with recommendations to the City Council.
Staff Responsibilities:
~ Provide a presentation of the draft Debt Policy prepared by the City's
Financial Advisor, and answer Committee Member questions; and
~ Forward the Committee's Memorandum to the City Council.
Timeline
Staff expects that this presentation will take place during a meeting with another
Work Plan assignment in October 2014.
Staff Time:
Staff report preparation for the Committee
Committee Member Advance Q&A
Staff preparation for presentation
Distribute FAC Memorandum to City Council
Total Staff Time Required
3 hours
2 hours
2 hours
1 hour
8 hours
5. SUBJECT TO CITY COUNCIL DIRECTION, REVIEW THE FISCAL IMPACT
OF ANY PROPOSAL TO EXTEND THE STORM DRAIN USER FEE, AND
MAKE RECOMMENDATIONS TO THE CITY COUNCIL
During 2002-2004, pursuant to direction of the City Council, the FAC studied
funding alternatives for the City's storm drains. Based in part upon the FAC's
work, the City Council directed that a proposal for a storm drain user fee be
placed before the voters. The storm drain user fee with a 30-year duration was
approved by the City's voters in 2005 via a mail-ballot election of property
owners. In 2006, a proposal to reduce the duration of the fee from 30 years to 10
years was approved by the voters during a general election open to all registered
voters.
The original program identified $25.2 million of storm drain projects in 2005
dollars. Many of those projects have been completed, but at least $9.4 million of
the originally identified storm drain projects (in 2005 dollars) remain unfunded.
This $9.4 million estimate includes $1.6 million for the Altamira Canyon drainage
project. Staff expects that the actual cost of the Altamira project will far exceed
the original estimate; which does not include right-of-way acquisition costs. Staff
also expects to complete an update of the storm drain master plan during FY14-
15; which will likely identify additional projects to be addressed.
C-8
Attachment A
The storm drain user fee will sunset in 2016. If the City Council directs Staff to
prepare a proposal to extend the fee, Staff anticipates that the City Council will
likely direct the FAC to review the fiscal impact of any such proposal and make
recommendations.
Committee Responsibilities:
~ If and when directed by the City Council, review the fiscal impact of a
proposal to extend the storm drain user fee; and
~ Prepare a FAC Memorandum with recommendations to the City Council.
Staff Responsibilities:
~ Prepare and present a fiscal impact of a proposal, and answer Committee
Member questions; and
~ Forward the Committee's Memorandum to the City Council.
Timeline
Staff expects the review of a proposal to extend the storm drain user fee may be
completed in two meetings.
Staff Time:
Staff report preparation for the Committee
Agenda preparation with Chair & distribution
Committee Member Advance Q&A
Staff preparation for presentation
Meeting attendance for 2 staff persons
Minute preparation
Distribute FAC Memorandum to City Council
Total Staff Time Required
6 hours
2 hours
4 hours
4 hours
8 hours
2 hours
1 hour
27 hours
6. 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
On March 5, 2014 and May 21, 2014, the FAC prepared recommendations to the
City Council supporting preparation of an Infrastructure Management Plan (IMP).
On July 15, 2014, the City Council established an Infrastructure Management
Advisory Committee. Staff expects that as the IMP is developed and the new
C-9
Attachment A
Committee makes recommendations, the FAC will be asked to review funding
options.
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 the City's infrastructure, and
· answer Committee Member questions; and
~ Forward the Committee's comments and recommendations to the City
Council, if applicable.
Timeline
Staff expects that study of infrastructure funding alternatives will be an ongoing
task that may begin with one meeting towards the end of 2014-15.
Staff Time:
Staff report preparation for the Committee
Agenda preparation with Chair & distribution
Committee Member Advance Q&A
Staff preparation for presentation
Meeting attendance for 2 staff persons
Minute preparation
Total Staff Time Required
3 hours
1 hour
1 hour
2 hours
4 hours
1 hour
12 hours
C-10
Attachment A
COMMITTEE RESOURCES
Budget
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.
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
C-11
Attachment A
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.
C-12
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.
Attachment B
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 ComlT)ittee
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·1mittce 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.
C-13
Attachment B
Section 5: Resolution No. 93-113 is hereby rescinded and replaced by this
Resolution.
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.
~C-m~·
City Clerk
Resolution No. 2008-64
Page 2 of 2
C-14