Staff Report
PREPARED BY: KAY WINER
Interim Assistant Town Manager
Reviewed by: Town Manager, Town Attorney, and Finance Director
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 02/21/2017
ITEM NO: 10
DATE: FEBRUARY 13, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: OPTIONS TO INCREASE PUBLIC PARTICIPATION ON THE COUNCIL FINANCE
COMMITTEE
RECOMMENDATION:
Staff recommends that the Council review the options and select one to increase public
participation on the Council Finance Committee.
BACKGROUND:
At the January 31, 2017 meeting of the Town Council Priority Setting Session, staff was directed
to explore options for increasing public participation on the two-member Town Council Finance
Committee. The direction from Council was the result of requests from the public to provide
input and to share expertise on a variety of financial issues facing the Town. The issues include
CalPERS pension liability, Other Post Retirement Benefits (OPEB), and the annual financial
audit/Comprehensive Annual Financial Report (CAFR).
Historically, the Council Finance Committee met annually to discuss the Comprehensive Annual
Financial Report (CAFR). Last year, the Committee also met to discuss the CalPERS unfunded
liability. The Committee typically gives a member of the public three minutes to provide input.
Given that the unfunded liability with CalPERS pensions and Other Post-Employment Benefits
(OPEB) is a Council Strategic Priority, staff intends to bring options and strategies to the Council
Finance Committee in March for discussion and possible recommendation prior to a full Town
Council discussion in April. Consequently, staff anticipates additional Council Finance
Committee meetings in 2017.
The public’s input, perspectives, and ideas are an important part of the Town’s deliberation of
financial concerns, particularly unfunded liabilities. Staf f requests Council’s direction regarding
a preferred approach to increase public participation on the Council Finance Committee.
PAGE 2 OF 4
SUBJECT: OPTIONS TO INCREASE PUBLIC PARTICIPATION ON COUNCIL FINANCE
COMMITTEE
DATE: FEBRUARY 13, 2017
S:\COUNCIL REPORTS\2017\02-21-17\Finance Committee\Staff Report Public participation on Finance Committee Final.docx 2/16/2017 1:50 PM
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
DISCUSSION:
Options:
There are three primary models for meaningful public participation.
1. The first is creation of a separate Finance Commission, comprised of public members
appointed by the Council. The Commission would advise and make
recommendations to the Town Council. Staff’s research shows that this model is
often structured to focus on specific financial issues, such as the budget or
monitoring a tax measure. The Commission is advisory to the Council. This model
was proposed by staff, but rejected by Council.
2. The second is to add members of the public to the existing two-member Council
Finance Committee after a formal application and interview process. To implement
this approach, the Council would need to adopt a resolution which would: define
the purpose and scope of the Finance Committee; determine if the public members
can vote; identify the qualifications, if any, to serve on the Committee; specify the
number of public members; and align the process and term for appointments to be
consistent with other Town Commissions.
3. The third model is to welcome the public to participate in all Council Finance
Committee meetings without formal appointment. The public would be invited to
join the Council Committee members at the table and participate in the discussion
of all agenda items without strict time limits. The Committee Chair would lead the
agenda and facilitate the discussion. This approach is similar to the way the Council
Policy Committee currently functions.
If the Council wishes to pursue approach #2 (adding public members to the Council Finance
Committee), staff recommends that the following parameters be drafted in a resolution for
adoption at the next Council meeting.
Council Finance Committee Purpose and Scope
Presently, the Council Finance Committee deals with a full range of finance-related
issues facing the Town. The public members of the Finance Committee would
participate in all meetings. The Council may wish to define the purpose and scope of
the Committee. For example, the major issues that the public has already expressed
interest in and a keen desire for participation, include CalPERS unfunded pension
liability, OPEB, and the annual audit/Comprehensive Annual Financial Report (CAFR).
PAGE 3 OF 4
SUBJECT: OPTIONS TO INCREASE PUBLIC PARTICIPATION ON COUNCIL FINANCE
COMMITTEE
DATE: FEBRUARY 13, 2017
S:\COUNCIL REPORTS\2017\02-21-17\Finance Committee\Staff Report Public participation on Finance Committee Final.docx 2/16/2017 1:50 PM
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
Voting
Another issue to consider is whether the public members of the Finance Committee
would have voting rights or if their function is to provid e input to the Council
Committee members during deliberations.
Potential Qualifications to Serve as a Public Member of Finance Committee
1. Resident of Los Gatos and a registered voter;
2. Five years of experience in at least one of the following:
a. Financial experience in a corporate, business, or government setting;
b. Principal or officer at a financial auditing firm;
c. Investment banking;
d. Finance or budget management;
e. Certified public accountant (CPA)
Options for Number of Public Members
The Town Council would need to determine the number of public members to join
the two Council members on the Committee.
Selection Process
Staff recommends that the appointment process follow the same procedures as
described in the Town Council Policy entitled Commission Appointment Policy.
Term of Appointment
The Town Commissioners typically serve for three (3) years. Terms of appointment
should be for at least three years to allow sufficient time for the public members to
develop an in depth understanding of the financial policies and issues facing the
Town to provide meaningful input. Appointees to the Finance Committee should
have the opportunity to serve additional terms, consistent with other Commission
appointments.
CONCLUSION:
The Town Council has made the decision to increase public participation on the Finance
Committee. This report provides alternatives on the role and functions of the public members ,
appointment process, and length of service on the Finance Committee. Since this is a new
process for the Council, it can be viewed as a “pilot,” and evaluated after the first year of
implementation, with any appropriate changes made at that time.
PAGE 4 OF 4
SUBJECT: OPTIONS TO INCREASE PUBLIC PARTICIPATION ON COUNCIL FINANCE
COMMITTEE
DATE: FEBRUARY 13, 2017
S:\COUNCIL REPORTS\2017\02-21-17\Finance Committee\Staff Report Public participation on Finance Committee Final.docx 2/16/2017 1:50 PM
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
COORDINATION:
This report was coordinated with the Finance Department and Town Attorney’s Office .
FISCAL IMPACT:
The existing staff would continue to support the Council Finance Committee. Staff has also met
with members of the community to answer their questions and review Town financial
documents. At this time, the Finance Department is able to absorb additional fiscal impacts
related to increased public participation .
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.