FEBRUARY 5, 2003 INANCE ADVISORY COMMITTEE MINUTES THE COURT: Because we have so much on the agenda, {TKPWEBG} I being a quick study we'll go ahead

MINUTES

CITY OF RANCHO PALOS VERDES

FINANCE ADVISORY COMMITTEE

FEBRUARY 5, 2003

The meeting was called to order at 7:00 P.M. by Chairman Wolowicz at the City Hall Community Room, 30940 Hawthorne Boulevard, for the purpose of conducting the business pursuant to the Agenda. Roll call was answered as follows:

PRESENT: Clark, Curtis, McLeod, Wallace, and Wolowicz

ABSENT: Butler, Smith (excused)

Also present were Director of Finance and Information Technology Dennis McLean; Accounting Manager Kathryn Downs; Senior Administrative Analyst Gary Gyves; Deputy City Attorney Mark Mandell, from Richards, Watson & Gershon; Director of Public Works Dean Allison; Audit Partner Kevin Pulliam, from Vavrinek, Trine, Day & Co., LLP; and Recording Secretary Dianne McGivern.

Chairman Wolowicz thanked Member Smith for his dedicated service over the years as he announced Member Smith’s retirement from the committee. Chairman Wolowicz recommended sending a formal letter of recognition of Member Smith’s retiring. He asked Director McLean to investigate the procedures for replacing Member Smith.

APPROVAL OF AGENDA

Chairman Wolowicz suggested adding discussion of FAC Vice Chair appointment to the agenda. With no opposition, the amended agenda was adopted.

FAC VICE CHAIR APPOINTMENT

Chairman Wolowicz announced that he has been reappointed to serve as chair for another year.

Member Clark nominated Member McLeod as vice chair, seconded by Member Curtis. No objections were noted. The motion passed by acclamation.

APPROVAL OF DECEMBER 11, 2002 MINUTES

Member Curtis suggested that the recess and reconvene should have preceded the paragraph it is currently following.

Deputy City Attorney Mandell suggested that the recess and reconvene belonged between the discussion of the five-year model and the financing alternatives discussion.

Vice Chair McLeod agreed and stated that Member Clark had submitted grammatical changes.

Director McLean agreed to make the changes.

Chairman Wolowicz motioned to approve the minutes as corrected. Vice Chair McLeod seconded. The motioned passed unanimously.

PRESENTATION OF GASB 34 OVERVIEW

 

Chairman Wolowicz stated that understanding the changes in the financial statements and continuing dialog regarding its attributes is crucial.

Accounting Manager Downs introduced Kevin Pulliam as the audit partner assigned to the audit of the City’s financial statements.

Mr. Pulliam gave a ten-minute PowerPoint presentation regarding GASB Statement No. 34 and its impact on the City’s financial statements.

Chairman Wolowicz inquired regarding plans to make a presentation to City Council.

Director McLean indicated that in light of the City Council being comfortable with segregation of restricted and unrestricted funds, that there are no current plans to transition from the current method of managing city funds.

Mr. Pulliam stated that reporting is the only thing that will change. He commented that the books would not have to be changed; merely the way financial statements look will change.

Member Clark asked for the differences between how intergovernmental fund transfers will be accounted for according to GASB 34. She inquired about why transfers are in a different revenue classification.

Mr. Pulliam stated that transfers between funds would not change. He commented that in the government-wide statements they would be eliminated; however, the fund statements will still show them.

Chairman Wolowicz applauded Mr. Pulliam’s presentation and requested a copy of the presentation slides.

Mr. Pulliam offered to email the presentation to Director McLean.

Chairman Wolowicz suggested to Director McLean that staff provide an ongoing explanation of how items move between the financial statements of CAFR and the new model. He also recommended making a similar presentation to City Council to aid them in their decision-making regarding City funds.

Director McLean stated that GASB 34 was implemented early inclusive of the infrastructure. He complemented the auditing firm and the consultants for working together to achieve their goals on time.

RECESS AND RECONVENE

Chairman Wolowicz called for a break at 8:05 p.m. The meeting resumed at 8:17 p.m.

Chairman Wolowicz complemented the staff and the committee on there being an absence of a letter of reportable conditions in the CAFR.

Member Clark noted that the CAFR has never been late.

FINANCING ALTERNATIVES UPDATE

Director McLean introduced the project team as consisting of Director of Public Works Dean Allison, Joan Cox of Harris & Associates, Deputy City Attorney Mark Mandell, Member Clark and Vice Chair McLeod.

Director McLean gave direction on making a presentation to City Council regarding the City’s sewer system, storm drain system and open space planning, Recreation and Parks Task Force.

Chairman Wolowicz thanked Director McLean for his excellent report.

Vice Chair McLeod stressed the importance of presenting the information to the City Council in an explanatory and concise manner.

Vice Chair McLeod referred to a prior discussion where the option of presenting an express statement to the Council was addressed. She stated that the Council could then make its own decision.

Chairman Wolowicz explained that the intent of the FAC was to make recommendations and then to assign a cost to those recommendations. He added that in order to attain the goals outlined in the recommendations that an assessment fee would be necessary.

Upon inquiry by Member Curtis, Director McLean indicated that the target date for addressing the Council about the five-year model is yet to be determined.

SELECTION OF A FAC MEMBER TO THE GLOBAL NEEDS TEAM OF THE OPEN SPACE, PLANNING & PARKS AND RECREATION TASK FORCE

Director McLean explained that two members from the FAC should be selected to serve on the team to advise the hired consultant in his global needs assessment, which includes a phone survey. He encouraged the appointment of Member Clark and Vice Chair McLeod to serve on the team.

Member Clark and Vice Chair McLeod accepted the appointment.

Chairman Wolowicz explained the community’s need to be aware of the competition for funds.

Vice Chair McLeod stated that the School Bond Issue is in direct competition for City imposed fees.

Chairman Wolowicz encouraged the timeliness of the report to the City Council so that the public can be aware that there is a need for funds beyond the School Bond Issue.

STATE BUDGET UPDATE

Senior Analyst Gyves stated that the state budget is still unresolved. He stated that two favorable bills, AB4 and AB6, are likely to be vetoed by Governor Davis.

Senior Analyst Gyves stated that the result is The City will receive the VLF fees through the end of the fiscal year; however, for FY2003-2004, there has been no determination. He stated that the amount of revenue potentially at risk is $1.6 million. He listed other funds at risk, such as the Traffic Congestion Relief Fund, the State Mandated Cost Reimbursement, and the Redevelopment Agency’s (RDA) Housing Set-Aside funds.

Director McLean responded that the state would not be able to take the Housing Set-Aside funds if the RDA is obligated to build low to moderate-income housing.

Director McLean informed the FAC that the City Manager intends to offer a contingency budget plan to the City Council in the event the VLF back-fill is confiscated by the state.

UPDATE – GENERAL PLAN STEERING COMMITTEE

Chairman Wolowicz gave a brief outline of the status of the General Plan. He stated that the first section of the Plan is still incomplete.

Chairman Wolowicz stated that certain items have been redefined. He indicated that options and ideas about the first section would be explored at the next Steering Committee meeting.

POSSIBLE CHANGE OF FAC MONTHLY MEETING DATE

 

Director McLean explained that the next meeting on February 26th is in direct conflict with the General Plan Steering Committee meeting. He stated that he would advise the FAC as plans for a possible meeting date change are made.

REPORTS BY LIAISONS

Chairman Wolowicz stated that during the General Plan Update Steering Committee, an announcement was made that negotiations are going well with Mr. Hahn regarding securing funds for the open space acquisition.

PUBLIC COMMENTS

Tom Redfield, 31273 Ganado Drive, warned against instituting a new tax. He suggested explaining the City’s financial bind to the residents to elicit more of a positive response and willingness among the residents to help financially.

Director McLean commented that switching to a proactive mode vis-à-vis road conditions and repair is a more expensive approach.

Vice Chair McLeod reported that by following the Pavement Management Program, the City saved a good amount of money through prevention of major problems.

ADJOURNMENT

At 9:07 P.M., the meeting was formally adjourned to Wednesday, February 26, 2003, 7:00 P.M.

______________________________

Chair, Financial Advisory Committee

ATTEST:

_____________________________

Diane McGivern, Recording Secretary