Audit 11-08-2012City of Cupertino
Audit Committee
Special Meeting Minutes
November 8, 2012
1. CALL TO ORDER
At 4:04 p.m. David Woo called the meeting to order at Cupertino City Hall, 10300 Torre
Avenue, Conference Room C.
2. ROLL CALL
Community Members Present: Raymond Yin, Eno Schmidt, Angela Chen
Council Members Present: Rod Sinks, Barry Chang
City Staff Present: David Woo
Absent: None
3. APPROVAL OF MINUTES
Community Member Schmidt moved to approve the minutes of the regular meeting of
July 19, 2012. Community Member Chen seconded and the motion passed unanimously.
4. ORAL COMMUNICATIONS - NOME
S. WRITTEN COMMUNICATIONS - NONE
6. NEW BUSINESS
A. Treasurer's Investment and Budget Report for September 2012
Finance Director Woo discussed the City portfolio composition and money market
allocation being over the policy limit. Committee members and staff talked future and
past investments purchases, cash flow requirements, low yields, safety /liquidity/yield
priorities, investment advisors, and other types of investments for the City portfolio.
They discussed the role of the Committee in making investment purchases. Regarding the
PARS OPEB trust, Committee members and staff discussed possible investing in ETFs
and the short -term and long -term impac-.s and reasons for contributing $14 million this
year to pay off the OPEB unfunded liability. The relationship of the increased liquidity of
the City portfolio to pay the PARS contribution this year was discussed. Council member
Sinks suggested investing into ETFs for the cost savings and Council member Chang
suggested doing it on a trial basis. Committee members came to a general consensus that
other types of investments for the City portfolio should be looked at and that for the next
regular meeting staff report back as to what other cities are investing in.
Committee members and staff discussed the General Fund Budget Report for September
2012 and the accompanying charts. Woo talked about the reasons for the large revenue
fluctuations in budget vs. actual, current: vs. prior year budget, and current vs. prior year
actual. Indicators for the current 2 °d fiscal quarter and ending projections for the fiscal
year were also disclosed. Committee members came to the general consensus that the
current revenue /expense charts need to be replaced and the budget report table needs to be
enhanced with narratives and data explaining actual and budget fluctuations in a manner
similar to what was talked about tonight:.
Community Member Schmidt motioned to accept the report with the direction that future
quarterly reports, starting with the one due in January 2012, replace the current
7.
9.
City of Cupertino
Audit Committee
Special Meeting Minutes
November 8, 2012
expenditure and revenue graphs with more descriptive information on how the City is
currently doing versus the budget and the prior year. For the next Committee meeting,
staff should provide a cash flow schedule and show its relation to portfolio liquidity and
average maturity. For the next Committee meeting, staff should report back on what other
cities are doing in investments. Yin seconded, and the motion passed unanimously.
OLD BUSINESS - NONE
OTHER COMMITTEE UPDATES/REPORTS — NONE
ADJOURNMENT
The meeting was adjourned at 5:22 p.m.
David Woo
Finance Director