HomeMy WebLinkAbout10.25.2017 SP Minutes @2:00MINUTES
SPECIAL MEETING
BUDGET STANDING
COMMITTEE
c911FO OF THE
CITY OF SOUTH SAN FRANCISCO
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
Meeting to be held at:
CITY HALL, CITY MANAGER'S
CONFERENCE ROOM
400 GRAND AVENUE
SOUTH SAN FRANCISCO, CA
WEDNESDAY, OCTOBER 25, 2017
2:00 p.m.
Call to Order. Time: 2:01 p.m.
Roll Call. PRESENT: Vice Mayor Normandy and Mayor Gupta
Public Comments.
None.
MATTERS FOR CONSIDERATION
1. Motion to approve the Minutes from the meeting of May 25, 2017.
Motion — Vice Mayor Normandy / Second - Mayor Gupta: to approve the minutes. The motion carried
unanimously.
2. Presentation regarding investment portfolio update. (Jeff Probst and Jayson Schmidt, Chandler
Asset Management)
Jeff Probst, VP Chandler Asset Management, introduced Carlos Oblites, Senior Vice President of
Chandler Asset Management. He presented an overview of legacy policy, current policy, 2015
portfolio transition, and current portfolio diversity.
Carlos Oblites, Senior VP Chandler Asset Management, added information on the City's standing
in July 2017.
Mr. Probst discussed the portfolio ratings.
Mayor Gupta asked how frequently the portfolio was reviewed. Mr. Probst explained their
investment strategy, rather than betting on market outcomes. He discussed quarterly analysis of
assets. Mayor Gupta discussed the City's obligation to make safer investments. Mr. Oblites
explained the process for developing, executing and implementing the strategy. He discussed
daily observations of the portfolio. Mr. Probst discussed caution taken to assure the public's
funds. Mayor Gupta stated he wanted to ensure a sense of discipline about investing the public's
money.
Mr. Probst explained the changes in the yield based on the new investment policy. Mr. Oblites
explained the duration as the biggest driver of risk and return. Mayor Gupta acknowledged the
benefit of creating a more diverse portfolio. Mr. Probst graphically displayed the divergence
change with the policy change and stated the portfolio was increasing its yield. He estimated the
three -year total return of 1.48% basis point return, an additional $650,000. Mr. Oblites explained
the impact of changing from two security to a well diversity portfolio. Mr. Probst ensured
continued risk management, analysis of credits, diversification in the portfolio, and analysis of the
relative value. Mayor Gupta stated it was clear that the strategy of diversification paid off. Mr.
Probst summarized the returns and performance. Mr. Oblites explained changes in market value
and impact on the portfolio. Mayor Gupta asked the cash out value. Mr. Probst discussed the
difference between the purchase yield and average market yield. He stated the portfolio was
currently at a very slight loss.
3. Report regarding transmittal of the year -end financial results and recommend that the City
Council amend the Fiscal Year 2016 -17 budget. (Richard Lee, Director of Finance)
Financial Services Manager Miller summarized surplus funds, revenues, and the self - insurance
fund. Mayor Gupta asked about insurance. Director Lee explained general liability and self -
insurance for Worker's compensation.
Vice Mayor Normandy stated the revenues and expenditures did not match. Director Lee
explained that the PowerPoint showed actual revenues and expenditures but the narrative was the
difference between budgeted and actual.
Manager Miller recommended accepting the year -end report and moving it forward to Council.
Mayor Gupta asked the major changes. Director Lee discussed the unexpected Police Department
budget surplus due to overtime management.
Vice Mayor Normandy asked the reason for increased business license revenues. Director Lee
explained that taxes were increased by CPI and new development. Vice Mayor Normandy asked
allowable uses of the Infrastructure Reserve Fund. Director Lee discussed strategies to get through
the recession in 2009 -10 including not replacing retirees and reduce efforts on building
maintenance and consequences in infrastructure. Vice Mayor Normandy asked what the
Infrastructure Funds had been used for. Director Lee stated funds were used for the Caltrain
Station.
Mayor Gupta asked the balance. Director Lee stated the Infrastructure Reserve and Caltrain
Station Reserve balance was $13 million. He stated the $4.9 million ending balance would
increase by $2.2 million with Council approval.
BUDGET COMMITTEE MEETING OCTOBER 25, 2017
MINUTES PAGE 2
Mayor Gupta discussed potential use of Infrastructure Reserve Funds.
ADJOURNMENT
Being no further business, Mayor Gupta adjourned the meeting at 2:54 p.m.
Submitted b
r
Gabriel RodriglieYDeputy City Clerk
City of South San Francisco
BUDGET COMMITTEE MEETING
MINUTES
Approved by:
CA�
Liza Normandy, Ma r
City of South San Francisco
OCTOBER 25, 2017
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