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HomeMy WebLinkAboutApproved Minutes - January 11, 2018Finance Committee Meeting Minutes January 11, 2018 Page 1 of 12 CITY OF NEWPORT BEACH FINANCE COMMITTEE JANUARY 11, 2018 MEETING MINUTES I. CALL MEETING TO ORDER The meeting was called to order at 3:00 p.m. in the Crystal Cove Conference Room, Bay 2D, 100 Civic Center Drive, Newport Beach, California 92660. II. ROLL CALL PRESENT: Council Member Diane Dixon (Chair), Mayor Pro Tem Will O'Neill, Council Member Kevin Muldoon, Committee Member William Collopy, Committee Member Patti Gorczyca, Committee Member Joe Stapleton, and Committee Member Larry Tucker ABSENT: None. STAFF PRESENT: City Manager Dave Kiff, Assistant City Manager Carol Jacobs, Finance Director/Treasurer Dan Matusiewicz, Deputy Director, Finance Steve Montano, Budget Manager Susan Giangrande, Rukshana Virany, Anthony Nguyen, Chief Chip Duncan, Jamie Copeland, and Administrative Specialist to the Finance Director Marlene Burns OUTSIDE ENTITIES: Shayne Kavanagh (Government Finance Officials Association), Sam Savage (Probability Management), and Ken Brown and David Schey (HdL Companies) MEMBERS OF THE PUBLIC: Mr. Jim Mosher III. PUBLIC COMMENTS Chair Dixon opened public comments. Jim Mosher suggested the Finance Committee reflect upon their accomplishments, item still pending, and their work plan for the upcoming hear. He is interested in a Finance Committee review and discussion of the City’s Comprehensive Annual Financial Report. Chair Dixon stated many of Mr. Mosher’s inquiries may be answered as part of the items on today’s agenda. There were no further public comments. IV. CONSENT CALENDAR A. MINUTES OF NOVEMBER 9, 2017 Recommended Action: Approve and file. MOTION: Gorczyca moved, and O’Neill seconded, to approve the minutes, as amended. The motion carried, (6 – 0, 1 abstention “Muldoon”). Finance Committee Meeting Minutes January 11, 2018 Page 2 of 12 V. CURRENT BUSINESS A. RISK BASED RESERVE ANALYSIS OVERVIEW Summary: Consultant will provide an update and overview of the Risk-based Reserve Analysis. Recommended Action: Receive and file. Chair Dixon introduced consultants Shayne Kavanagh and Sam Savage, presenters of this item. The Risk Based Reserve Analysis Overview was a Finance Committee work plan project approved the past June. The project began in November after the RFP was approved and was understood to be a five to six month project. Mr. Kavanagh acknowledged the opportunity to work with the City and displayed a PowerPoint Presentation focused on providing a “high-level” overview of the project scope. As reflected in the first slide, the project is focused on whether the City’s reserves are adequate for the City’s risk strategy, and noted “risk-modeling” would be a recurring theme in the scope of work. The risk analysis would determine the optimal amount of reserves. Mr. Kavanagh further provided a definition of “risk” and the likelihood of the occurrence of loss/undesirable events. He further spoke regarding the impact and magnitude of such events and how reserves and other mitigation strategies could structure the City’s ability to quickly and effectively respond to such events. A slide was displayed which illustrated the “normal distribution,” or bell curve representation of various incident frequencies. Various examples were provided, including bell curve representations of male height and annual snowfall. Mr. Kavanagh also described “lognormal” distributions, such as earthquakes, which have varying degrees (large earthquakes versus tremors). As part of the average snowfall example, Mr. Kavanagh relayed that although snowfall is a relatively frequent event in certain geographical areas, there are outlier incidences where magnitude of snowfall could have such negative impact it would not be cost-effective to utilize reserves. There are other risk-mitigation tools that would be more effective in such outlier cases. Mr. Kavanagh displayed a slide which portrayed “confidence” levels, which the City may consider in terms of funding reserves to mitigate most losses the City, could anticipate occurring. He provided an example where increasing confidence level incrementally may not provide the most cost-effective solution for the amount of additional “confidence.” In this example, for an increase from 90% confidence to 95% confidence, the City would have to spend a relatively large amount to receive only a 5% increase. The incremental funds may be better utilized by funding other risk mitigation strategies. He further described combined distributions, defined as the likelihood of two or more major large-scale risk events (i.e., hazardous material incident and major wildfire) occurring at the same time. He noted that without analysis of the distributions of the events together, there could be a tendency toward overestimating the risk to which the City is subject. The method of the project was described, which includes a statement that uncertainty is inevitable, however utilizing various tools such as reference cases, developing analogous situations, and historical community and regional data detailing risks/impacts of extreme events, natural disasters, recessions, and other uncertain events will assist in developing the City’s risk/reserve strategy. In reference to the normal distributions, Mr. Kavanagh mentioned addressing “tail” end of the distribution is where the study would be focused. Finance Committee Meeting Minutes January 11, 2018 Page 3 of 12 Mr. Kavanagh stated Sam Savage invented the proposed open-source risk modeling method and the City has access to the same technology. Mr. Savage mentioned the method’s “open standards,” and that it could work to aggregate risks and make modeling much easier to do. Mr. Kavanagh described the “Monte Carlo” analysis that allows the model to be bombarded with iterations of an event to assess the magnitude of damage related to an event. Mr. Kavanagh spoke in detail regarding the ability of their analysis to recommend various strategies including confidence levels of reserves, the type of risk mitigation responses required, including insurance, which will inform the City and by which the City can formulate an appropriate reserve/risk policy. In summary, Mr. Kavanagh described the four Phases of the project including, revenue and stability, break down to different categories, dependencies (how different risks can impact each other), and multi-year analysis to be more explicit about time periods (one year versus five year outlooks). Mr. Collopy inquired whether the consultants were working with staff, in a questionnaire scenario, to determine the City’s own opinion of individual risks. Mr. Kavanagh responded affirmatively that staff was interviewed, the disaster management plan was provided, and that various inquiries were made to understand the City’s particulars as related to risk. Mr. Collopy stated although he did not see tsunamis and airplane crashes specifically mentioned in the distributed materials, he assumed they would be included in the scope of the project. Mr. Kavanagh responded affirmatively that items such as earthquakes, floods, wildfires, landslides, and highway incidences would be included in the review. Mr. Collopy commented that risk analysis appears to him to be principally “disaster” management, mitigating the cost impacts of a disaster, and inquired regarding revenue volatility. Mr. Kavanagh responded the two “halves” of disasters are disasters, such as earthquakes, etc., and revenue volatility. There are also secondary factors, including debt levels, which could constrain the City’s ability to financially respond to a disaster. Mr. Collopy inquired whether a “parametric” insurance policy would be recommended in particular, or was it mentioned in the scope of work as a mitigation factor the City should consider. Mr. Kavanagh defined a “parametric” insurance policy as one which provides payout if some particular given event, or threshold, comes to pass. He provided an example from the New York Transit System, where a parametric policy provides payout should water gauges reach certain thresholds. In relation to the City’s strategy, it may not be cost effective to utilize reserves in certain scenarios. A parametric policy may be a better response depending on the magnitude of a certain event. Mr. Collopy stated this particular project was called for last summer as a response to the Finance Committee reviewing the City budgets line-by-line. The Committee probed whether the reserves were adequate and it is his belief that this analysis will be very valuable. He is of the impression this analysis will provide, on an “expected value” basis, five or six categories of the types of reserves the City should hold and it will cover a certain “confidence” or probability of events/incidences. Finance Committee Meeting Minutes January 11, 2018 Page 4 of 12 Mr. Savage responded by stating the City will need to determine its comfort level with risk and their risk modeling will help assess how increasing reserves reduces the chance of going over-budget. Ms. Gorczyca commented pursuant to her understanding of the scope of work the consultant would provide a recommendation of the types of reserves required and an associated funding number. She would like to see a “system” of reserves, such as cash reserves, to address different risks. She would also like to see mitigation measures such as the use of insurance and cross-collateralization. She expressed support for the scope of work to include the various risk mitigation measures such as cash, insurance, and debt and how these methods would work together to address the City’s risk strategy. In summary, she mentioned the City does have debt service and pension obligations that are not flexible and may also be considered as risks. Mr. Collopy responded his understanding of the consultant’s role was to provide the City with a series of choices on how to deal with its analyzed risk and the value/probability of the risk. However, it is the Finance Committee’s role to provide recommendations to the City Council of how to select among those choices. He inquired whether the Finance Committee will make those choices or whether the consultant would provide a series of choices, such as insurance, cash, debt, and/or parametric policies. Mr. Kavanagh referenced Slide 9 of the PowerPoint Presentation, detailing “cumulative probability.” His firm will provide tools such as this and present “confidence” level strategies to the City for final decision-making. The firm provides the tools to assist the City in deciding what their final strategy will be. They provide “decision support” to navigate through the complexities of probability distributions. Mr. Savage stated that “risk is in the eye of the beholder” and their firm can assist the City in understanding the uncertainties that exist. They provide models to help the City assess risks and the City makes the final decision as to how to mitigate the risk. The models provided will help the City to perceive risk and uncertainty. Ms. Gorczyca stated she hoped to see better identification of the tools that the City can use to understand risks and how do they apply to the City’s particular situation. Then the City would make final decisions on the particular strategy. Mr. Savage responded that the tools provided by his firm would allow the City to experiment with the various types of debt strategies and see the results of various mitigation measures quantitatively. Chair Dixon inquired whether the decisions and recommendations would come from the Finance Committee or would this matter be taken to the public discourse. Mr. Kiff responded his view is that the Finance Committee would review the materials and data and make a recommendation in the form of a policy to the City Council. Mr. Savage stated part of this is a learning experience as to how to perceive risks, probabilities and distributions, and the tool will allow the Committee to experiment with various levels of reserves. Mr. Stapleton inquired as to the budget of the project ($25,000) and how many firms responded to the RFP. Mr. Matusiewicz stated the RFP was sent out to 600 companies, with ultimately only two responding formally to the RFP. Finance Committee Meeting Minutes January 11, 2018 Page 5 of 12 Ms. Gorczyca stated the consultant’s analytic capability must be based upon a significant database. She commented the magnitude and frequency of climactic risks are increasing. She inquired as to whether these incidences have been noted by the firm and how recently has their database been updated. Mr. Kavanagh reported their data includes historical data and recent climactic events. It is also important to look at the data in an informed fashion with knowledge of the context. Chair Dixon opened public comments. Noting there was no one who elected to speak, Chair Dixon closed public comments. Mr. Matusiewicz referenced the project schedule was included in the packet and inquired of the consultants as to the overall status of the project. Mr. Kavanagh stated the project was currently in Phase I/Phase II and it was likely the final project would be complete in April, ahead of the project schedule. He also affirmed materials and data would be presented to the City as they were completed. Chair Dixon inquired whether any members of the Finance Committee would be in favor of working alongside staff on this project, in order to track along with the process. Mr. Collopy and Ms. Gorczyca expressed interest in participating alongside staff. Chair Dixon affirmed the participation by the Finance Committee members would not include oversight, but rather to track along the project and provide the full Committee with updates to gain further understanding of the process. Mr. Matusiewicz confirmed that staff could move along with the project if scheduling with the participating Finance Committee members became complex. Mr. Collopy affirmed that the participating members would just sit in on meetings or stop by, however, would be mindful if scheduling became burdensome. Mr. Savage expressed support for additional members observing and understanding the process and would send a link from GFOA. Ms. Gorczyca suggested the project include infrastructure, utilities, utility failures, and the resulting business interruptions. Chair Dixon inquired whether infrastructure was part of the original scope of work. Mr. Montano stated the charge from the Finance Committee was to focus on the General Fund. Mr. Collopy commented the statement of work provided by the consultant makes reference to infrastructure, water, and wastewater and if such risks exist, would the General Fund pay in the event of an incident or does the District pay for their part? Mr. Matusiewicz responded there would need to be a scope of work change as the City initially signed on for a study of the General Fund reserve only for the $25,000. The City can always add on to the project. There is a possibility of bringing in Public Sector Digest to look at all of the City’s current master plans and “fill in the cracks.” He inquired whether the infrastructure program is comprehensive and how far does the Finance Committee want to go with this project. Finance Committee Meeting Minutes January 11, 2018 Page 6 of 12 Mr. Collopy preferred to see what product the Committee gets for the General Fund recommendation and whether at that point it is worth pursuing further study. He does not clearly understand how infrastructure risk can be separated from the initial study. Chair Dixon inquired whether the City is supplying all master plans for the consultant’s analysis. Mr. Matusiewicz responded they have not provided them as to date. Mr. Kiff stated there are similar situations in other cities. In reference to the sea wall collapse, those may not always be related to earthquakes or floods. They would add this to be added to Phase II, if necessary. He believes that much of the costs related to infrastructure risks will appear in the initial project results. Mr. Collopy stated the Finance Committee would seek to understand the model and what it does. It is a tool to come up with the best risk-adjusted budget for the Committee to endorse to the City Council. Ms. Gorczyca commented claims against the City seem to be escalating. Chair Dixon inquired if the project will review legal claims. Mr. Kavanagh responded legal claims are covered in the scope of work. Chair Dixon thanked the consultants for their presentation. There was no further action taken on this item. B. CONSULTANT OVERVIEW OF PROPERTY AND SALES TAX REVENUES Summary: Consulting specialists in Property and Sales Tax will provide an overview of revenue prospects. Recommended Action: Receive and file. Chair Dixon introduced this item as a follow up to the economic study session held earlier in the week. She introduced consultants David Schey and Ken Brown. David Scheyy displayed a PowerPoint Presentation and stated that property taxes in California boil down to three aspects: taxable value within the City, 1% General Levy allowed under Proposition 13, and the City’s share of the General Levy. The first table distributed included detailed valuations within Newport Beach and was broken down by Land Use categories. Residential property makes up 84% of the City’s total value, followed by Commercial, and then Unsecured value (boats, computer equipment, etc.). The total increase in value this year was $3.3 billion. There are portions of the City that exist within the Orange County/Santa Ana Heights Redevelopment Project Area for which the City receives revenue from the base year value. The City does not receive revenue directly for “increment.” The growth incremental value is approximately $1.2 billion dollars and the revenue for that is diverted to various entities. A slide was presented detailing the tax rate area and illustrated how the 1% tax rate is broken up among the taxing entities. Chair Dixon affirmed the City receives approximately 17% from the 1% tax. Mr. Schey responded the chart detailed all 1% revenue and also included information from a small lighting district. Finance Committee Meeting Minutes January 11, 2018 Page 7 of 12 Chair Dixon commented the average property tax payer would understand this is the 1% property tax and how that money is ultimately allocated. Mr. Schey commented the City is divided into “tax rate areas,” and if you take everyone’s 1% tax, the chart illustrates how the shares are allocated. Ms. Gorczyca stated Orange County is unique in that there are so many regional agencies getting a share of the property tax. Orange County made a decision to allocate property taxes among various agencies and there is dilution of the property tax due to that decision. Mr. Schey commented all of California operates under the same revenue and taxation codes. He presented a slide that illustrated the City’s share of the property tax revenue to give a sense of where the revenue is coming from. Eighty-four percent comes from residential property tax, 10.7% from commercial, and the remainder from the unsecured rolls, which include kiosks, equipment inside retail stores, and computer systems. Mr. Matusiewicz stated we do not receive the unsecured property tax directly. The funds go into a pool and the City receives a proportion of it. Mr. Schey detailed how unsecured property taxes and supplemental taxes are distributed based the City’s Assessed Value (AV) expressed as a relative percentage of AV of the entire County. The tax dollars do not flow directly to the City of Newport Beach; however, the City will receive a share of supplemental value of certain property taxes collected, for example, of a hotel built in Costa Mesa, since it is within the County. Mr. Schey displayed a table that shows directly how revenues are allocated. This slide illustrated that the City’s portion of secured/unsecured value, excluding out RDA portion, is $52.5 billion. Of note, there was an airplane registered in the City, which is allocated differently. For that, one-third of the property tax value comes to the City. Ms. Gorczyca inquired as to how the portion of the airport that is within the RDA impacts the City’s tax revenues. Mr. Schey responded that the incremental revenue includes some aircraft value. The project area base year value is $124 million. There is additional revenue of $860,000 per year related to utilities collected by the State Board of Equalization, derived by a formula, and then allocated by the County to the various cities within it and other taxing agencies. This number increases nominally each year. There is also property tax “in-lieu” of the Vehicle License Fee that is not really connected with the Vehicle License Fees, which was derived to ease the burden on cities. Mr. Schey stated that after dissolution of redevelopment the City now receives a small amount of “pass through” funds and in addition, a share of the “residual” revenue in the former RDA area. This amounts to approximately $2 million per year and will continue to increase as values in the former project area go up. Chair Dixon inquired if there are any risk elements to that distribution or pending legislation related to how that amount is calculated. Mr. Schey confirmed there is no pending legislative action. He stated there are revenues for which the City can project well; however, there will be some fluctuations in the ultimate revenues due to supplemental revenues, prior year collections from delinquencies, and deductions for refunds. The City’s projected amount is a conservative number. Chair Dixon confirmed that it is likely the City will bring in more than budgeted, as the number is not a full representation of the entire property tax categorization. Finance Committee Meeting Minutes January 11, 2018 Page 8 of 12 Ms. Gorczyca inquired whether the tax arrangement with the former RDA project area concludes when the bonds mature. Mr. Schey stated once the bonds are paid off the arrangement dissolves. Ken Brown, HdL company, displayed a PowerPoint Presentation providing a status update on the City’s sales tax revenues. Graphs were presented that illustrated the City’s per capita taxable sales as compared to Orange County as a whole, and the State of California. The projections show great strength and a vibrancy of the economy, however, there are some vulnerabilities. The City has a large portion of its sales tax revenue generated from the auto transportation sector. If there is a stumble in that industry, the City’s revenues will be impacted. Chair Dixon stated it could also be impacted if the auto industry changes its source. Ms. Gorczyca stated that ownership converting to a preference for leasing could also impact revenues in this category. Mr. Brown affirmed leases are handled differently. Year-over-year there is a significant slowdown in sales tax revenue statewide. Newport Beach is still growing; however, it is experiencing a slowdown. The top three sales tax generators in the City are auto (30%), restaurants/hotels, and then general consumer goods. He provided an overview an overview of the main revenue generators and trends related to growth. He stated he could not review individual business performance, as that information is confidential pursuant to State law. Overall, in auto and transportation, total national registrations were increasing through 2016, but have experienced subsequent decline. Traditional car sales are being impacted. Projected are for flat growth to slightly negative growth. Mr. Brown stated rising interest rates and increases in gas prices are impacting growth in this area. In the restaurant and hotel category, year-after-year this is one of the strongest performing categories, showing growth even during periods of recession. Currently, it is below the average in the recent quarter, and this is likely due to saturation in the restaurant industry. People are eating out less frequently and also working from home. There are also more service models that provide home meal delivery. There is still a positive trend in Newport Beach and it is expected to continue. In the consumer goods category, the consultants are seeing the impact of internet sales on traditional brick-and-mortar establishments. In 2000, the internet comprised approximately 4% of overall sales and now it is at 13%. Most of the revenue from internet sales goes to the County pool if it is generated out-of-state, from which the City would get a proportionate share. Statewide, department stores sales are decelerating significantly and these sales account for 30% of consumer good sales in Newport Beach. The City experienced strong growth in this category through 2014-2015; however, the growth has notably trailed off. Chair Dixon inquired whether the tax revenue generated or the allocation of revenue generated from on-line purchases might be impacted due to any pending legislation. Mr. Brown stated this matter is scheduled to be reviewed by Congress. It would be beneficial to the City to capture more of this revenue. He stated the League of California Cities and his firm have individuals assigned to track this legislation. In summary, the State of California has an antiquated tax system that is not keeping up with the new service-based economy. Finance Committee Meeting Minutes January 11, 2018 Page 9 of 12 Ms. Gorczyca inquired whether HdL has the ability to assess the “down on the ground,” matters, citing examples as the particular hotels which are scheduled to be “off-line” due to refurbishment and current vacancies in the mall and along PCH/Corona del Mar. Mr. Brown affirmed he works with staff to take a “bottom-up” approach and confirmed he personally monitors the area to include as much real-time data in the projections as possible. Mr. Collopy expressed concern about the modest growth projections and the auto sales revenue being flat at best. He inquired as to what is the best advice that can be given to staff in order to make accurate projections for the City’s budget. Mr. Brown summarized that restaurant revenues are increasing, gas prices are increasing, and building and construction is one of the strongest current categories. Business and industry are relatively stable, and with all factors combined, there is still a projection for slow, but modest, growth. Mr. Muldoon confirmed if a Newport Beach resident orders an item and it is shipped to a residential address in the City, the sales tax goes to the County pool and it is distributed among the various cities based upon their proportional share. Chair Dixon confirmed the consumer now gets charged sales tax in California for that purchase, where years ago, it did not. Mr. Brown confirmed that based upon population, the City receives a portion based upon a share of the overall internet sales. Mr. Collopy stated in November the Finance Committee received data indicating a smaller increase than projected and inquired if the information was still accurate. In the large categories, will the General Fund still be ahead? Mr. Brown confirmed he attended three different economic meetings recently that did not indicate the projection of any recession. HdL is cautious and mindful of the trends, and has noted the trends toward increases in interest rates and gas prices. In summary, they are still projecting slow growth and a cautious outlook. There was no further action taken on this item. C. LONG RANGE FINANCIAL FORECAST (LRFF) Summary: City staff will provide an update on efforts to improve the City’s Long Range Financial Forecast and provide a comparative review of best practices to other cities. Recommended Action: Receive and file. Steve Montano provided a brief update on the City’s Long Range Financial Forecast and introduced the software that was recently purchased for this purpose. He reviewed the forecasting model utilized by the City of Sunnyvale, as requested previously by the Finance Committee. Their City policy requires a 10-year forecast and also includes a 20-year financial plan, which is presented each year with the annual budget. It includes all revenue and expenditure categories and is a detailed model, which informs budget projects, develops schedules, and plans for pay back of funds. The City of Sunnyvale also has a “Resource Allocation Plan” in place that is a reserve to stabilize service levels during years with revenue instability. Ms. Gorczyca inquired whether this functions similar to a rate stabilization fund. Finance Committee Meeting Minutes January 11, 2018 Page 10 of 12 Mr. Montano responded the fund is utilized for stabilization and will cover deficits. Concurrently, they have built-in structures to plan for recession-type events, include an agreed upon plan to cut certain programs and services, as well as revenue enhancements (i.e., higher fees) which can be immediately mobilized if necessary. There is an understanding and fiscal strategy for cuts. Mr. Montano also presented a brief review of the strategies employed by the Cities of Palo Alto and San Clemente. Palo Alto employs a 10-year forecast, over 52 pages long, which includes 10 staff contributors and this process has been in place since 1997. They utilize trend projections on revenues and expenditures, along with various narratives in a reader-friendly format. The City of San Clemente employs a 5-year financial forecast, over 378 pages long, and includes 15 staff contributors. They provide detailed information and review all funds, including the General Fund and reserve funds. This process is updated each year. The City of Newport Beach provides a financial forecast based upon standards and best practices recommended by professional organizations such as the GFOA. A slide was presented which illustrated the recommended steps in the development of a long-term financial plan and compared the City’s practices to the recommendations. Mr. Collopy stated he was impressed as to how the City was following the recommended process and inquired as to the areas the City could improve upon. Mr. Montano stated the City launched its first long-range financial plan last year and traditionally, has not completed 10 to 20 year type of financial forecasting. The best time to conduct such a process would be prior to the commencement of budget review, as the long- range financial forecast informs the budget recommendations. Mr. Montano detailed the new software tool, a PFM product, which was built for collaboration purposes. It provides better graphing and chart illustrations. It was implemented in December and full implementation is projected for February. Ms. Gorczyca noted the importance of reliable data on pension and capital cost projections. She suggested utilizing a number of sources including John Bartel’s projections for “what-if” analyses. There was no further action on this item. Chair Dixon left this meeting at this juncture and turned the meeting over to Vice Chair Muldoon. D. REVIEW OF FINANCE COMMITTEE RESOLUTION Summary: The Committee will review its objectives as set forth in Council Resolution 94-110 as amended by Council Resolution 2017-58. Recommended Action: Receive and file. This item was continued to a future meeting. E. BUDGET AMENDMENTS Summary: Receive and file a staff report on the budget amendments for the prior quarter. Recommended Action: Receive and file. Vice Chair Muldoon briefly inquired regarding two accounting shifts in the Retiree Medical Fund and Fund 1130 ($4 million in wastewater fund decreases). Finance Committee Meeting Minutes January 11, 2018 Page 11 of 12 Mr. Kiff explained for Fund 1130, Public Works closes out projects. If they did not spend as much as projected, the remainder return back to the Fund from which it was originally allocated for accounting purposes. Ms. Giangrande also commented the shifts were for accounting purposes. Ms. Gorczyca inquired whether the purchase of the McDonald’s site was moving forward. Mr. Kiff affirmed the escrow; however, it would not be reflected as a budget amendment. Staff confirmed the purchase was allocated in the budget. F. REVIEW OF FINANCE COMMITTEE WORKPLAN Summary: Staff will review with the Committee the agenda topics scheduled for the remainder of the fiscal year and highlight those work plan items that were carried forward from the prior fiscal year. Recommended Action: Receive and file. This item was continued to a future meeting. G. PENSION DISCUSSION Summary: Agenda item reserved for discussion regarding the status of the City’s pension liability, payment strategies, CalPERS policy updates and/or advocacy efforts. Recommended Action: Discussion if applicable. This item was continued to a future meeting. VI. FINANCE COMMITTEE ANNOUNCEMENTS ON MATTERS WHICH MEMBERS WOULD LIKE PLACED ON A FUTURE AGENDA FOR DISCUSSION, ACTION OR REPORT (NON-DISCUSSION ITEM) Mr. O’Neill inquired as to the possibility of the formation of a subcommittee to review Council “F” policies. Members O’Neill, Stapleton, and Tucker expressed interest in participating. Mr. Kiff stated this item is not on the agenda for today’s meeting; however, it can be agendized for the next meeting. Pursuant to Committee discussion, the upcoming meeting schedule was agreed to be February 15, March 15, April 12, May 10 and 31, and either a June 21 or 28 meeting. It was agreed upon that the reserve study would not likely be completed in time to incorporate recommendations into the 2018-2019 budget could help inform staff and Council prior to the preparation of the following year’s budget. VII. ADJOURNMENT The Finance Committee adjourned at 5:00 p.m. to the next regular meeting of the Finance Committee. Filed with these minutes are copies of all materials distributed at the meeting. The agenda for the Regular Meeting was posted on January 8, 2018, at 1:59 p.m., in the binder and on the City Hall Electronic Board located in the entrance of the Council Chambers at 100 Civic Center Drive.