Audit 01-24-2013 City of Cupertino
Audit Committee
Regular Meeting Minutes
January 24, 2013
1. CALL TO ORDER
At 4:08 p.m. Finance Director Woo called the meeting to order at Cupertino City Hall,
10300 Torre Avenue, Emergency Operations Center(moved from Conference Room A).
2. ROLL CALL
Community Members Present: Angela Chen, Eno Schmidt, Raymond Yin
Council Members Present: Rod Sinks, Mark Santoro
City Staff Present: Carol Atwood (through 4:35), Jaqui Guzman, David Woo
Absent: None
3. APPROVAL OF MINUTES
Community Member Yin moved to approve the minutes of the special meeting of
November 27, 2012. Community Member Schmidt seconded and the motion passed 4-0
with Council Member Santoro abstaining since he was not a Committee member at that
time.
4. ORAL COMMUNICATIONS -NONE
5. WRITTEN COMMUNICATIONS -NONE
6. NEW BUSINESS
A. Accept Treasurer's Investment and Budget Report for December 2012
Public Agency Retirement Services (PARS) representative Mitch Barker presented the
PARS Post Retirement Healthcare Plan Trust Funding Client Review highlighting
actuarial valuations, demographics, and plan contributions. HighMark Capital
Management investment manager Andrew Brown presented investment returns and
performance rankings of mutual funds in the Trust. He discussed the recent change of
some investments to exchange-traded funds. Barker and Brown answered questions from
Committee members regarding intermediate-term fixed income fund durations, the
interest rate outlook, actuarial evaluations, rate of return targets, investment allocations,
fees, and the possibility of changing investments, rate of return expectations, and
allocations.
Finance Director Woo discussed the Investment Portfolio report, the Investments by Type
Managed Portfolio chart, and the Rate of Return Comparison chart. Senior Management
Analyst Guzman presented the General Fund Budget Report, including the new data on
year-to-date estimates and year-end projections.
Community member Schmidt motioned to accept the Treasurer's Investment and Budget
Report for December 2012. Community member Chen seconded and the motion passed
unanimously.
Further discussion among Committee members and staff continued about the
intermediate-term, fixed-income portion of Trust investment portfolio, the allocation
between equities and fixed-income within the portfolio, and retiree health liabilities. The
City of Cupertino
Audit Committee
Regular Meeting Minutes
January 24, 2013
Committee directed staff to discuss with PARS and report back about possibly reducing
the minimum 25% allocation in intermediate-term fixed income investments in the
Investment Guideline Document. The Committee also directed staff to report back about
what the actuarial report says regarding the distribution of future retiree payouts over
time.
7. OLD BUSINESS—NONE
8. OTHER COMMITTEE UPDATES/REPORTS—NONE
9. ADJOURNMENT
The meeting was adjourned at 6:15 p.m.
David Woo
Finance Director