Audit 10-23-20171. CALL TO ORDER
City of Cupertino
Audit Committee
October 23, 2017
At 4:03p.m., Chainnan Eno Schmidt called the meeting to order at Conference Room A,
Cupertino City Hall , 10300 Torre Avenue, Cupertino CA 95014.
2. ROLLCALL
Committee Members Present: Chairman Eno Schmidt, Mark Zavislak, Jim Luther, and
Councilmember Steven Scharf
City Staff Present: Kristina Alfaro, Beth Viajar, and David Brandt
Absent: Councilmember Rod Sinks
Guests: Richard Rosenthal and Carolyn Cox of US Bank, Jennifer Meza of PARS, and
Graham Schmidt of Cheiron were present
3. APPROVAL OF MINUTES
Committee Chair Schmidt motioned to approve both the July 11th and August 24, 2017
meeting minutes , Councilmember Scharf seconded and the motion passed unanimously.
4. ORAL COMMUNICATIONS -NONE
5. OLD BUSINESS -NONE
6. New Business
A. OPEB Actuarial Report Review
Graham Schmidt of Cheiron discussed the City of Cupertino OPEB Actuarial Valuation
Report as of January 1, 2017. Committee Chair Schmidt had several questions regarding
the report that Graham addressed. The Committee asked Graham Schmidt and City Staff
to evaluate the efficacy of providing the Audit Committee 1) with additional reporting on
various sensitivity analyses on the actuarial assumptions including lowering the discount
rate to 6.75%; and 2) providing in future years beginning in 2018 an actuarial report in
time to be considered by the Audit Committee in its January meeting.
B. Performance Review of the OPEB Trust
Rick Rosenthal of US Bank provided a performance review as of September 30 , 2017.
There was some discussion regarding the 7% portfolio target. The portfolio is achieving
that target.
C. Review the Treasurer's Investment Report for QE September 2017
Via jar gave a presentation of the Quarter ending September 30 , 2017 Treasurer's
Investment Report to the committee. Councilmember Scharf motioned to approve the
report, seconded by Committee member Zavislak , and the motion passed unanimously.
The Committee asked 1) that City Staff investigate (possibly in consultation with the
independent auditors) additional ratios and information that could be provided in the
Cupertino Audit Committee
Treasurer's Investment Report further to support the graph showing the City 's sufficient
liquidity over future periods; and 2) in a future meeting discuss the City's evaluation of
and arrangements with Wells Fargo Bank as a service provider to the City.
D. Update on Status of Finance Manager position
Viajar told committee that an offer was accepted and the person should start
approximately November 27 , 2017.
E. Review Standard Work Plan for Audit Committee
Committee Chair Schmidt asked that the current version of the Work Plan be updated to
reflect the current wording in the Investment Policy Statement. He also asked staff to
evaluate the efficacy of having the OPEB Actuarial report for the next fiscal year
available for Committee review in its January committee meeting.
6. ADJOURNMENT
Committee Chair Schmidt motioned to adjourn at 5:58pm with the next regularly
scheduled meeting of the Committee on November 20th at 4:00pm, seconded by
Committee member Zavislak motion passed unanimously.
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