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CITIZENS FINANCIAL ADVISORY COMMITTEE
SPECIAL MEETING MINUTES
Tuesday, November 12, 2019, 8:00 a.m.
CITIZENS FINANCIAL ADVISORY COMMITTEE SPECIAL MEETING
CALL TO ORDER — Committee Chair Mickey Segal called the meeting to order at 8:04 a.m. in the
Council Chambers Conference Room.
ROLL CALL
PRESENT: Howard Ursettie, Robert Miller, Mickey Segal, Tommy Thai, Jessica Louie
ABSENT: None
1. PUBLIC COMMENTS — None
2. REPORTS FROM STAFF LIAISONS — None
3. REPORTS FROM CITIZEN'S FINANCIAL ADVISORY COMMITTEE MEMBERS
a. Report from Committee — None
4. DISCUSSION ITEMS
a. Presentation Regarding Pension/OPEB Comprehensive Management Plan by UFI
Julio Morales of Urban Futures, Inc. presented a comprehensive Management Plan to address
the City's entire pension Unfunded Accrued Liability (UAL). Mr. Morales provided a recap of
the UAL of the City's retirement costs and several approaches to managing the City's pension
and OPEB liabilities.
The Comprehensive Management Plan will be in Policy format that will address pension/OPEB
liabilities that requires a long-term, sustained financial discipline by the City. The
Pension/OPEB policy will cover the City's financial objectives with a full description of the City's
plans and liabilities, what the financial metrics/targets would be, and a complete methodology
for allocation of additional resources. The idea for this comprehensive policy would be that it
would provide guidance in making budget decisions, i.e. how to utilize budget surplus and one-
time monies, while providing flexibility within the set parameters on Internal Resource
Allocation and Budgeting. However, the City already has comprehensive parameters on the
allocation among funds, so this would just be a matter of putting it into the policy.
Additionally, the policy will address funding solutions to implement (Fresh start, POBs, Tax-
Exempt Exchange, Leverage Refunding, Fund Allocation, Use of Reserves, etc.), guidelines
for use of excess monies, and guidelines for use of reserve and excess monies towards
pension/OPEB liabilities.
POBs and 115 Trusts options were discussed as well. This led to a discussion on credit ratings
and if this will affect the City's credit. The idea is that while Pension/OPEB funding policies are
not mainstream yet, there is an anticipation that rating agencies will view this positively and
incorporate it into their checklist for"strong management policies and practices".
Chairperson Mickey Segal brought up the idea of utilizing private life insurance companies to
run a mortality table. There will not be any medicals required and the risk is minimal over time.
The idea would be very similar to a social security mortality table, and while this is a very
unique model, many fortune 1000 companies utilize something similar to fund their top-level
executives' retirement. Jessica Louie made a motion to look further into this alternative, and it
was seconded by Robert Miller. The motion passed 5-0.
The next steps will be to provide to the Committee a draft version of the Pension/OPEB
Funding Policy and determine how to roll the ideas to Council. The consensus was to start with
the documents, and have a study session to unpack all of this information to Council so that
there is an understanding of the information so they can make an informative decision that
best fits the City of Arcadia. Meanwhile, Chairperson Segal will provide the contact information
on the insurance company to City Manager, Dominic Lazzaretto and Administrative Services
Director, Hue Quach.
It was the consensus of the group to schedule the next meeting on December 4, 2019 at 8:00 a.m. in
the Council Chambers Conference Room.
ADJOURNMENT
Chairperson Segal adjourned this meeting at 9:41am.
By:
Mickey Segal, Chairperson Hue Quach, Staff Liaison