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Attachment 3 From: Phil Koen [mailto:pkoen@monteropartners.com] Sent:Monday, October 17, 2016 4:32 AM To:Laurel Prevetti Cc: Robert Schultz; jvannada@gmail.com; Terry Duryea; Lee Fagot Subject: Please include this email in the Addendum for Item 12 of the Tow Response to the Policy Committee Report dated September 19, 2016 In Other Comments of the above mentioned staff report, the comment below was included regarding adding residents Add two resident members to the Council Finance Committee to ens Financial Operator (CFO) experience to ensure that residents with financial ba maximum understanding of the existing and proposed financial pla w; Þ ¦¦©;-z·; ·w; z·;©;· E ©;z7;· · ¦©·z-z¦·; z·;7 Ez-z 7z-Òzu w; Þ w ·Þ /Ò-z /z··;; Þz·w ä /Ò-z a;,;©u w; /Ò-z Cz Þ;-; · ¦©·z-z¦·; · -wz;Ý; ·w; ,Ý;;·z;7 Ò·-; E 7zm E ·w; ;ãz·zm 7 ¦©¦;7 Ez-z ¦ E ·w; Þu It is our position that the residents of the Town of Los Gatos a Committee. Under the current structure the unfunded accrued liabes of the pension and post-retirement health plans have increased from zero in 2000 to approximately $50m as With the recent approval of the $12.2m commitment to the Almond Grove Street pro within existing reserve funds to access for pay- The current committee has 2 council members as voting members with Staf to attend sessions and address the committee in an allotted amou Diversity of views and deep inspection of competing ideas cannot be accomplished in a committee comprised people. A committee of two is not a committee. Additionally, non financially trained nor does the current structure of the Commitith GFOA best practices to include independent financial experts on the Committee. by all of the residents. Including highly qualified residents on this committee will improve the diversity of discus transparency and resident involvement in an area that is foundat We have not been given any compelling reason why residents are not included as members of tee. We strongly encourage the Town Council to revise the current Com members of the Committee. Terry Duryea Lee Fagot Phil Koen Jak Vannada From: Phil Koen [mailto:pkoen@monteropartners.com] Sent: Monday, October 17, 2016 10:43 AM To: Laurel Prevetti Cc: Robert Schultz; leefagot@gmail.com Subject: Response to attachment 1 of agenda item 12 Laurel, Would you please pass this to the Town Council in response to At Thank you. Lee Fagot Phil Koen Response to the October 15, 2016 Memo from Staff Below is the section of the above identified Staff report which residents to the Finance Committee. Our responses to the Staff rRED below. In response to public requests to add two resident members to the Council Finan Committee requested additional information regarding several que requested information are provided below. What is the difference between a Council Committee and a Commission? A Council Committee is a subset of the Council. As such, only tw Committee in compliance with the Brown Act. A Council Committee recommendations to the full Council. For example, every year the Council Finance Com the draft Comprehensive Annual Financial Report (CAFR). The Town Town's independent auditor answer questions and address issues re Council Committee. This level of review and recommendation allows for detailed exploratirmation prior to the full Council considering the CAFR. Response: This is an interesting issue because it is our understinance Committee currently consists of only two members of the Town Cou argument that currently the Committee might be exempt from the Brown Act. We would request that that City Attorney review and confirm that the current Committee and that the Committee has continuing subject matter jurisdiction. The Finance Committee has no members with a formal finance education or training. The GFOA best practices recommends that at least on independent financial expe difficult to see how the current committee can provide the prope detail review of the CAFR without having the appropriate technical backgr A Commission is advisory to the Town Council. A Commission cons Council. Commissions typically consider emerging issues and makew ordinances, studies/plans, or programs. For example, the Youth C Attorney on the recently enacted smoking ordinance; the BPAC is Bicycle Pedestrian Master Plan; and T&P is exploring potential Vision Zero measures. Response: We believe the Town Council has wide latitude in prope through a formal action. The action can include a specific chart which are important to the Town. We would suggest that we work with Staff to create such a char What are the implications of adding residents to a Council Commi Most cities have Council Committees (some are called Council Subthat do not have residents. This is important because it allows for Council membe expertise and fully examine issues prior to consideration by the recommendation reflects a subset of the elected body which is directly accountable to the voters. All meetings are public and residents are welcome to provide comment meetings. Response: A Finance Committee that comprised both Town Council mts can serve this purpose. Council members that are interested will be able t prior to consideration. Additionally they will be able to become interacting on the Committee with highly qualified residents of the Town. Properly approved, with a comprehensive charter and regularly scheduled meetings, this newly constituted be subject to the Brown Act. The Town losses nothing and gains g Adding residents to a Council Committee would mean that it is no longer a Council CommitteeIt becomes a different kind of advisory body, such as the Conceptua General Plan Committee with a mix of appointed residents and eleresident is added, the Council members would be a majority of the Committee. Adding practical as the Committee may end up with tie votes; however, a of resident members. Response: We find this concern interesting because today there are only two members Committee. Are there issues today with tie votes? We think that thoughtfully constructed to achieve a number of objectives, the ident participation. The current structure is broken and does not serv As provided to the Council Policy Committee at its last meeting, modified the membership of its Finance Committee to add four citizens appointed by the full Council to a Committee that historically (since 1994) had three Councilmemb subject to confirmation by the full Council. Based on a scan of very unique situation. Typically, if a jurisdiction has a need for citiz Commission. Response: We do not agree that having a Finance Committee compri und a number ofprogressive cities adopting this model as a result of realizing that government finances are beco difficult to manage. Incurring $50m in unfunded pension and post-employment medical plans should be a compelling enough reason to change. We would gladly welcome the opportunity to work with the Staff t newly constituted Finance Committee. What are the implications of adding a new Commission? If the Town were to create a Finance Commission, the Council wou resolution and clearly articulate the purpose and area of responsion. For example, the City of Los Altos has a Financial Commission which investment policies that are ultimately considered and adopted b Response: We agree with Staff that clear charter for this newly uted Finance Committee needs to be developed. We have looked at a number of existing charters policies and activities of the Town is an idea we agree with. A Finance Commission in Los Gatos would be supported and staffed associated expenses of preparing agendas, writing action minutes Commission reports, attending meetings, and completing other tasks. If the Council P interested in this option, it should be raised at the Council's early 20I7. Staff would then determine the budget implications a any staffing augmentations that might be needed to suppo11 the new work associated with a new Co Response: We would only urge for the Town Council to address thi done and there is no benefit in waiting.