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Home My WebLink AboutTC Minutes 2017-02-15 TOWN COUNCIL REGULAR MEETING MINUTES CALL TO ORDER Mayor Fraser called the regular meeting of the Tiburon Town Council to order at 7:30 p.m. on Wednesday, February 15, 2017, in Town Council Chambers, 1505 Tiburon Boulevard, Tiburon, California. ROLL CALL PRESENT: COUNCILMEMBERS: Doyle, Fraser, O'Donnell, Tollini ABSENT: COUNCILMEMBERS: Fredericks PRESENT: EX OFFICIO: Town Manager Chanis, Town Attorney Stock, Director of Administrative Services Bigall, Town Clerk Stefani ORAL COMMUNICATIONS Bob Austrian,45 Southridge West,said he wished to follow up on his letter and last comments made to Council in October 2016 in regard to the Town's View Ordinance. He said he and several neighbors have discovered several issues in the ordinance and requested it be revised,particularly the way the ordinance is implemented. He said that while the procedure to protect your home's views is outlined, there are several ways around that procedure that do not serve affected residents well. He asked that Staff review the ordinance for possible revision. Mayor Fraser asked that Staff follow up on Mr. Austrian's original letter, and meet with him to discuss possible modes of relief. CONSENT CALENDAR CC-1. Town Council Minutes — Adopt minutes of January 18, 2017 meeting (Town Clerk Stefani) CC-2. Town Council Minutes — Adopt minutes of February 1, 2017 meeting (Town Clerk Stefam) MOTION: To adopt Consent Calendar Items 1-2, as written. Moved: 'follini, seconded by O'Donnell VOTE: AYES: Unanimous ABSENT: Fredericks Town Council Minutes 404-2017 February 15, 2017 Page 1 ACTION ITEMS AI-1. Trestle Trail Update—Approve final Trestle Trail design and authorize solicitation of bids (Department of Public Works) Town Manager Chanis said this item would not be heard before the Council tonight, but at a later date instead, at the request of the parties involved. AI-2. Town Audit Report—Recommendation to accept and file the Town's Fiscal Year 2015- 16 Basic Financial Statements and Independent Auditor's Report (Director of Administrative Services Bigall) Town Manager Chanis introduced Ralph Marcello,of Marcello&Company C.P.A.s,to give a brief presentation on the Fiscal Year 2015-16 audit report. Mr. Marcello thanked the Council for the opportunity to perform the audit. He said the Town's finance records were in good condition, and the Town's management did a good job implementing his firm's recommendations,designed to reduce internal control risks.He said limited segregation of duties is a common issue is smaller governments due to smaller office staff. Mr. Marcello said his firm was able to provide the town with an "unqualified" audit opinion, the highest opinion a CPA firm can offer. He said he would like to focus his presentation on the pension plan. He said governments are now required to report their over-or under-funded net pension liabilities in their government-wide financial statements. In 2015, the Town reported $5.2 million net pension liability. He added that CalPERS is not responsible for providing the reports a government needs to determine their net pension liability. A government must outsource those reports to an actuarial company. His firm audited those reports and incorporated them into the financial statements. Mr. Marcello said the Town participates in a "Cost-Sharing Multiple-Employer Defined Benefit Pension Plan", meaning a retiree receives a fixed pension amount based on the number of years worked and their ending salary. He said there are 2000 other government entities part of this plan. CalPERS, as the plan fiduciary, determines the annual contribution for the members. He said if a member city were to go bankrupt, other member cities would be responsible for the bankrupt city's annual contribution requirements. Mr. Marcello said that as of June 30, 2015, Total Pension Plan Assets were $24.9 billion and Total Pension Plan Liability was $31.7 billion. The total Net Pension Liability was $6.8 billion, $5.4 million of which is the Town's share (less than 1% of the total plan). The Town's other retirement liability — Other Post Employment Benefit Plan — assists qualified retirees with medical insurance payments. The Town's liability is approximately $2 million. Town Council Minutes 904-2017 February 15, 2017 Page 2 Mr. Marcello said taking note of the net pension liability is important because it will allow staff and the Council to know what their future obligations are and to plan for future budgets. He said the pension liability had decreased 2.4% from the previous year. Ca1PERS has stated that one-third of the funds for pension benefit payments are provided by members(employers and employees)and two-thirds of the funds are provided by investment returns. CalPERS refers to their assumed rate of return on investments the "discount rate". A lower discount rate equates to higher member payments, because investment returns are low. In December 2016, Ca1PERS announced a plan to lower the discount rate over several years. Mr. Marcello said this will increase the Town's net pension liability by several million dollars, and will affect how the Town prepares their annual and long-term budgets. The California CPA Society asked Ca1PERS representatives what will happen if Ca1PERS does not have enough money to meet their pension obligations. Mr. Marcello said management should monitor this issue closely because the State may have legal obligations to make sure payments are made to State employees,but they may not be able to come up with enough money to pay for county and city employee pensions on short notice. Mr. Marcello then directed Council to the Annual Report for an analysis of how the Town's General Fund activities compare to the forecasted budget. He said property tax revenue exceeded the budgeted revenue by 3%this year. He said other tax revenue trends were positive: sales tax revenue increased 9% and TOT tax increased 1% over the prior year. Mr. Marcello said the General Fund revenue has been fairly consistent between$8-10 million over the past several years. He said the Town is economically dependent on property tax revenue and in the event of catastrophe or economic downturn, the Town may have to rely on reserves to meet its obligations and provide services to citizens. General Fund expenses increased about$850,000 over the prior year,and cash/investments remained about the same at around $14 million. Mr. Marcello reviewed the final two financial statements. The statement of net position shows that the Town has about $10 million in liability, mostly tied up in infrastructure and capital assets. The statement of activities shows expenses by the Town's departments. He concluded his presentation and said the Town's financial statements are prepared in accordance with generally accepted accounting principles and the audit opinion was issued without qualification. Mayor Fraser opened the floor for public comment. There was none. Vice Mayor O'Donnell asked if the Town had proceeded with putting some funds for the OPEB liability into a trust. Town Manager Chanis confirmed Staff had transferred $1.3 million of reserve funds into a trust. Town Council Minutes 04-2017 February 15, 2017 Page 3 O'Donnell also commented that Council and staff have no clarity on what the contribution to Ca1PERS will be in the years to come due to the discount rate change. Mayor Fraser agreed, and said the finance committee should remain cognizant of the Ca1PERS discount rate change and how the unknown contribution will affect planning for future budgets. He posed the question of creating a reserve fund for this uncertainty to be prepared. MOTION: To accept the Fiscal Year 2015-16 annual financial audit as prepared by Marcello& Company, C.P.A.'s. Moved: Doyle, seconded by O'Donnell VOTE: AYES: Unanimous ABSENT: Fredericks TOWN COUNCIL REPORTS There were none. TOWN MANAGER REPORT Town Manager Chanis thanked Director Bigall and her staff for their outstanding work to ensure the annual audit was acceptable. Chanis also said the Golden Gate Bridge,Highway and Transportation. District Board would be voting on the transfer of local Tiburon ferry service to Golden Gate Ferny at an upcoming meeting,possibly February 24,2017. He said if the vote passes,commuter service will transfer from Blue & Gold Fleet to Golden Gate Ferry 1-2 weeks following the vote. WEEKLY DIGESTS Received. ADJOURNMENT There being no further business before the Town Counc' he Town of Tiburon, Mayor Fraser adjourned the meeting at 8:05 p.m. JIM F AYOR ATTEST: �1 0-J- * LEA STEFA I, TOWN CLERK Town Council Minutes #04-2017 February 15, 2017 Page 4