Audit 04-14-20161. CALL TO ORDER
City of Cupertino
Audit Committee
Special Meeting
April 14, 2016
At 3:03p.m. Lisa Taitano called the meeting to order at Cupertino City Hall, 10300 Torre
A venue, Conference Room EOC, Cupertino, CA.
2. ROLL CALL:
Committee Members Present: Councilmember Sinks, Councilmember Paul, Eno Schmidt,
Mark Zavislak, Peter Shin
City Staff Present: Kristina Alfaro, Cheuk Law, Lisa Taitano, David Brandt
Absent: None
Guests: Rick Rosenthal and Carolyn Cox (US Bank), Mitch Barker and Jennifer Meza (PARS)
for item 5A and 5B.
3. APPROVAL OF MINUTES
Councilmember Paul moved to approve the minutes of the special meeting of March 21, 2016,
with an amendment to add Shin's request for additional verifications, Shin seconded and the
motion passed unanimously.
4. ORAL COMMUNICATIONS -NONE
5. NEW BUSINESS
A . Review of Retiree Health Trust Performance Report
Rick from US Bank gave a portfolio performance review as of December 31, 2015, with a
market review and outlook. This report included a new quaiierly transaction report and
tax lot report that the committee decided was not needed on an ongoing basis.
B. Annual approval of OPEB Trust Investment Policy
Taitano reviewed policy with committee members and guests. They agreed to make three
changes to wording; 1) Under the Investment Objective: 'Balanced' section, add
"Benchmark" to Target heading, 2) Update Current Assets to: $22,410,000, 3) Update
item 3c to read "Treasurer or designee" instead of "Audit Committee''. Zavislak moved to
approve policy with amendments suggested, Shin seconded and passed unanimously.
C. Review of Progress on Uncompleted Items from Previous Meetings, including
Standard Work Plan for Audit Committee
Committee reviewed a new document, Standard Work Plan for Audit Committee.
Discussed providing review of Auditor RFP process at October meeting . Taitano agreed
to add the OPEB perfo1mance repo1i to the Work Plan along with the Treasurer's Rep01t.
Schmidt pointed out item 7, distribution of MOIC to Audit Committee members and
added review of MOIC and AUP to next meeting.
D. Pass a motion to change regular start time to 3:00pm, Conf. room A
Cupertino Audit Committee Page 2
Shin moved to change the regular committee start time to 3:00pm, Zavislak seconded and
passed unanimously.
E. Annual approval of City Investment Policy
Councilmember Paul motioned to approve policy with recommendations outlined in Staff
Report dated April 5, 2016 , Shin seconded and passed unanimously.
F . Treasurer's Investment Report for 12/31/15 and 3/31/16
Taitano gave a presentation of the December 31, 2015 and March 31 , 2016 investment
reports to the committee . Taitano discussed adding duration as a measure of volatility/iisk.
The committee agreed to ask Rick at US Bank about the formula they use for this measure .
Councilmember Sinks motioned to approve reports , Zavislak seconded and passed
unanimously.
6. OLD BUSINESS
A. OPEB Actuarial Valuation Reports as of January 1, 2015
Taitano will add having the OPEB Actuary folks here for a presentation to the Standard
Work Plan.
7. ADJOURNMENT
The meeting was adjourned at 5:37pm by Zavislak and Sinks seconded.