It takes two to speak the truth — one to speak, and another to hear
— Henry David Thoreau


Since before the election in the spring of 2017 that included voting on Measure D, members of PVrrg realized that the City needed to investigate cost cutting and better efficiency in management in order to understand if a new parcel tax is necessary. We believed that a Citizens Finance Oversight/Advisory Committee was needed to help Council with Citywide financial management and potentially to draft a new parcel tax for the voters in order to meet current expenses.  We were confident that there are numerous competent resident professional financial experts who would be willing to volunteer to help solve the City’s financial problems.

At that time, PVrrg publically stated support for the establishment of such a committee and concern about Measure D without a rigorous financial review. For More information on the Measure D Parcel Tax, click here.

When Measure D did not pass, we began to actively advocate for the establishment of a Citizens Finance Advisory Committee and took up the task of researching how other cities utilized such a Committee to help manage their finances.  For more information on Financial Advisory Committees in other cities, click here

We are very pleased with the formation of PVE’s current Citizens Finance Advisory Committee and the selection of resident members with excellent financial experience and a strong commitment to invest significanttime and energy in trying to help out. We pledge our wholehearted support of the members of this Committee for their volunteer efforts on behalf of PVE. For more information on the FAC on the City website, click here.

Chronology of Events

8/8/2017 PVrrg sent its research and recommendation letter to the City -- click here

10/10/17 Larry Tramutola, political consultant hired by the City, recommended the City form a  “PVE Fiscal Oversight Advisory Committee”. To view the meeting, click here and got to Item 9.

1/10/18 City Voted to adopt Ordinance 17-727 establishing a Finance Advisory Committee. To view the meeting, click here and go to items 6 and 7.

tramatula recommendation.jpg

1/29/18 Finance Committee candidate interviews were held. There were 33 resident applicants with professional/financial experience who interviewed for the five Financial Advisory Committee member positions. 

Voting Record of Elected Officials:

On January 10, 2018, the five members of City Council; King, Vandever, Peterson, Kao, and Davidson voted unanimously for the establishment of the PVE Finance Advisory Committee.

PVE Finance Advisory Committee (FAC) Members

  • Amy Forte Chair) (Term ends 6/2020) –Senior manager in financial strategic planning at Toyota America
  • Mark Young - Co-chair (Term ends 6/2020) - Municipal finance consultant
  • David McGowan (Term ends 6/2020) - Forensic Accountant
  • Don Culler (Term ends 6/2019) –Engineer with financial management experiences
  • Ela Jhaveri (Term ends 6/2019) –Owner and CFO of diamond Business Company.
  • Victoria Lozzi (City Treasurer and non voting member) - Banker

To view each committee member's self introduction, go to  7:40 to 16:30 at this link.

Finance Advisory Committee Meetings: 

There have been five meetings and one joint meeting that was a Special Workshop with City Council.  Click on the links below to advance to the meeting that interests you:

All FAC meetings are open to the public, and you can sign up for e-notifications of meetings on the City website here. Unfortunately, not all FAC meetings are recorded.  Therefore as a public service, PVrrg has summarized the content of each meeting below, and we make the information available for the convenience of members of our community who don’t have the time to attend or watch the video recordings of the meetings (when available) , but want to keep informed of the essential activities of the FAC.

JOINT Meeting Special Workshop with City COuncil: July 24, 2018

For full agenda of the meeting, click here.

No video of the meeting was recorded. Minutes are not yet available.

During this meeting, the Financial Advisory Committee (FAC) presented several slides explaining PVE’s current financial situation. In addition, they presented an overview of the work they are proposing to do during the current (2019) fiscal year. For the slide presentations. click here.

A.    FAC member David McGowan began the meeting by leading a presentation he and Mark Young (his colleague on the FAC Operating Budget ad hoc committee) had prepared comparing how entities in the private sector (for example, corporations like General Motors) report their financial position and results versus how governments (including municipalities like PVE) report theirs. 

The City’s audited financial statements, are referred to as Comprehensive Annual Financial Reports, or CAFRs. They follow accounting rules known as Generally Accepted Accounting Principles (GAAP), which are set by an independent body whose mission is to establish and continually improve accounting standards for governments. The CAFRs contain two important sections:

  1. Government Wide Financial Statements (GWFS), which report the financial activities and position of government entities in a manner similar to the way private sector does. The City’s “Statement of Net Position” is analogous to a company’s Balance Sheet. “Net Position” is like the City’s Equity or Net Worth. The “Statement of Activities” is essentially the City’s P&L (Profit & Loss); it shows all income and expenses for the period. Instead of profit or loss, the City’s results are called the “Change in Net Position.” If this number is positive, it means the City’s revenues more than offset its operating expenses. If the number is negative, the City’s costs exceeded its revenues. Because the GWFS are presented on an “accrual basis,” showing all assets and liabilities of the City, they provide a broader and longer term view of the City’s financial health.
  2. Fund Financial Statements (FFS), which show the financial activities of the City for the current period and are presented on a “modified cash basis” as opposed to an “accrual basis.” Because the FFS do not take into account obligations of the City that will need to be paid for in the future, such as infrastructure maintenance (roads, sewers, etc.) and pension debt, they present a shorter term view of the City’s financial health. PVE’s current budget is ‘structurally balanced’ in municipal accounting terms, meaning there will be enough cash on hand to meet its short term (one year’s) needs. The FAC is not certain there is enough money, however, to meet long-term needs of the City, including satisfying its pension obligations and maintaining its infrastructure.

B.    A vigorous discussion ensued between the FAC and a City Council member regarding the role depreciation plays in accounting for the decline in Net Position. Depreciation expense for the City is roughly $4M per year. 

Councilman Vandever indicated he thought the FAC was focused on the “wrong things.” He strongly disagreed with presenting the decline in PVE’s Net Position over the past 8 years because he felt it was misleading. He noted the fact that “accrual accounting” is used in the City Wide CAFR Financials and, specifically, that depreciation expense is reflected in the numbers. In the Councilman’s opinion, this means they are not an accurate representation of the City’s financial situation.

The Councilman further stated, “no one runs their business on the basis of GAAP financial statements” and further claimed, “GAAP depreciation does not represent economic reality.”  He continued by drawing analogies to an apartment building he owns for investment purposes and to the chairs in City Hall. 

The Councilman noted that his building is nearly fully depreciated, so its value is close to zero on the books, regardless of the fact that it has a very high market value. He then pointed to the chairs in the room, all in excellent condition, correctly observing that the City probably wouldn’t need to replace them for many more years even though they may be close to or fully depreciated. 

Mr. McGowan made an effort to explain that depreciation, in fact, represents a true economic cost to the City.  

C.    Mr. McGowan then continued his presentation of the City’s financial history over the nine most recent fiscal years for which audits have been completed, 2009 to 2017. The graphs below were part of Mr. McGowan’s presentation. They illustrate some important trends: 

Graph I shows PVE’s REVENUES, which increased 22% from $18M in FY 2009 to $22M in FY 2017

Graph 1.jpg

Graph II depicts the City’s, OPERATING EXPENSES, which increased 47% from $17M in FY 2009 to nearly $25M in FY 2017

Graph 2.jpg

Graph III shows the City’s AVAILABLE FUNDS. This is like “money in the bank.” General funds and other “unrestricted” funds can be used for any type of expense. “Restricted” funds can only be used for certain, specific purposes such as sewers or police. 

Graph 3.jpg

Because City expenses have exceeded revenues in each of the past eight years, total Available Funds have decreased by approximately $7M. Projections based upon budgets approved by the City Council indicate that Available Funds will go down an additional $3M by FYE 2020.    

Graph IV shows PVE’s CHANGE IN NET POSITION, which decreased by over $17M between FY 2009 and FY 2017. 

Graph 4.jpg

D.    Mr. McGowan concluded his presentation by discussing the City Council’s request that the FAC do a long term financial plan for the City. He explained how critical this is to ensuring the economic health of the City for future generations. He acknowledged that, while the City’s annual budgets have been “structurally balanced” in Fund Accounting terms, this is only a short term measure of the City’s ability to meet its financial needs. The FAC plans to create a 10-year financial plan for PVE that will be updated each year as part of the City’s budgeting process.

E. Next, FAC Chair, Amy Forte, presented the FAC’s objectives and proposed work plan for the current fiscal year, which is depicted in the slide below:

FAC Workplan.jpg

F.  Next, the five FAC ad hoc committees reported on their objectives, timelines and the status of their work. Each of these committees is focused on one of the following issues: 1) Operating Budget 2) Pension Liability, 3) Capital Investment, 4) Revenue Opportunities and 5) Communications.

For the full presentation, see the last 5 slides here.   

Because we believe its pension liability is the number one financial challenge faced by our City, we have summarized the Pension Liability ad hoc committee’s report here:

Leading the discussion was Ela Jhavari who, together with Victoria Lozzi, our City Treasurer, serves on the FAC’s Pension ad hoc committee. She noted that the state agency that manages pension and health benefits for all PVE employees, the California Public Employees Retirement System, or CalPERS, calculates the City’s pension debt using a “negative amortization schedule.” 

This means that the City’s debt payments are applied only to interest and do not reduce principal. The remaining debt is accruing interest at 7.35%, which is being added to principal. Ms. Jhavari also stated that the City’s representative from CalPERs recently advised that total pension debt now stands at $49M. This is the amount the City would owe today if all pension eligible employees were immediately terminated and no new pension eligible employees were hired. Approximately 80% of this debt is attributable to our local police.
G.    Next, was a discussion regarding the status of filling the role of part-time financial analyst to support the FAC’s work. Funding for this position was approved by Council in March and included in the budget approved in May in response to concerns expressed by both the FAC and the City Manager related to additional workload the FAC’s information needs would create for staff. The City Manager estimated it will take three more months to hire this individual.  

H.    Additional Comments from City Council: 

  • Councilman Vandever and Councilwoman King indicated their impatience with what they perceived as a potential duplication of effort. Specifically, the FAC had proposed to revisit work done by the police consultant, Mike McClary, regarding ways to reduce the costs of maintaining our local police force. After significant research, Mr. McClary had presented the City with several recommendations, not all of which have been implemented. 
  • Mayor Peterson thanked the members of FAC for their good work.  She suggested using the reserve fund to pay down the pension debt. 
  • Councilman Davidson also thanked the FAC for its hard work.

PVrrg’s Perspective:    

A.    We found the presentation delivered by Mr. McGowan on the differences between corporate and municipal (fund) accounting to be extremely valuable. We extend our enthusiastic “thanks” for his efforts to educate us all. There has long been confusion about  terminology used by the City in explaining its financial activities. In our view, this has contributed to mutual misunderstanding between the public and the City. 

When the term “balanced budget” is used, the public believes there is money to cover all day-to-day operating expenses, while leaving enough for “savings” needed to keep our City safe and beautiful in the future, to maintain our roads, public spaces and other infrastructure and to pay off our pension obligations. Generally, the public frowns upon the City spending more money than we make. They view this as the City “living beyond its means,” or “deficit spending.” The City uses the terms “balanced budget” and “deficit” in very different ways. Neither is necessarily correct nor incorrect, but it is important that we have a common understanding of these terms.

For an example of how these differences in terminology confuse communications between the City and the residents, click this link to an exchange between the former PVE Mayor and some members of public:

Question #1:

B.    We applaud the forthrightness and candor with which Mr. McGowan presented the City’s financial history. Information taken directly from the CAFRs for the previous nine years shows some disturbing financial trends.  Over this period in time:

  • Annual City expenses grew at more than twice the rate of annual revenues. 
  • Annual spending by the City exceeded its income every year since FY 2010.
  • PVE’s available funds (money in the bank) dropped from a high of $32M at FYE 2010 to approximately $25M at FYE 2017. Based on projections provided by the City, these funds will decrease to $22M by FYE 2020. This is $10M in 10 years.
  • These factors, in combination with PVE’s growing pension obligations, have resulted in a $17M reduction in the City’s Net Position (like net worth or equity).

We believe it is extremely important that the City Council acknowledge these trends, identify their root causes and find ways to address and correct them before the City’s financial situation deteriorates further. 

We believe appointing the FAC was a great first step toward improving the City’s financial situation and that it indicates the Council’s commitment to prudent financial management of the City. 

The FAC’s work to improve the budget process, to create a 10 year strategic financial plan (including capital investment and debt reduction) and to identify sources of both additional revenues and cost savings will be, in our view, enormously valuable to the City Council in its efforts to strengthen the City’s financial health. 

C.    On the topic of declining capital investment: we respectfully, but heartily, disagree with Councilman Vandever’s comments on depreciation. We submit that the City’s failure to replenish its infrastructure or to save for future capital investment does in fact represent a true, and significant, economic cost.  

We do not feel the Councilman’s apartment building comparison, or his chair analogy, are valid. Here are some of the reasons:

  • First, US GAAP (Generally Accepted Accounting Principles), permit you to depreciate buildings for up to 50 years. That’s a long time! (Incidentally, our City Hall is well over 50 years old.)
  • Second, market value is not relevant unless you are trying to sell an asset or obtain financing. To our knowledge, the City is not planning to sell or borrow against its assets. Rather, they plan on continued use of these assets as they are currently deployed. Hence, their depreciated value is the most relevant economic measure.
  • Third, and perhaps most important, is the fact that things break and wear out. Anyone who owns a home knows it’s a constant “out-of-pocket” experience. If you left the building alone, you would need to replace it, very likely before the 50 years had passed.  Its replacement cost would undoubtedly far exceed its original cost. 
  • Finally, much of the market value of the Councilman’s apartment building is very likely attributable not to the building, but to the land it sits on. Land is not depreciated under GAAP because it doesn’t “wear out.”  Further, the market value of the property would, in fact, be negatively affected if the building were in poor condition.
  • As far as the City Hall chairs are concerned, they and their related depreciation are not material (accounting terminology for “significant”) in the context of the entire value of the City’ capital assets. Due to their lack of materiality, as well as the cost and effort required to account for and track them as capital assets, it may be better accounting practice to expense these chairs when they are purchased. That means, instead of putting them on the balance sheet and depreciating them over a number of years, just treat them like any other expense by deducting their entire cost from income in the year they are acquired.
  • One important final point on this topic we would ask the Councilman and his colleagues to consider is the fact that the $4M per year quoted by Mr. McGowan is the average amount of annual depreciation NET of new investment in capital assets. This indicates we are not restoring our existing assets, but letting them decline instead. Further, the fact that our Net Position is deteriorating indicates we are not only failing to preserve our existing infrastructure, but we are not saving money for future investment either.  
  • We strongly support the FAC’s efforts to put a long term capital plan together for the City and are very encouraged by the work the Capital Investment ad hoc committee is doing. We are also quite pleased and impressed with the level of cooperation the City Engineer and his team have provided to the FAC.

D.    We remain gravely concerned about the City’s mounting pension debt. We noted the pension calculations prepared by staff for the meeting agenda included only a snapshot of the debt at this moment in time. According to CalPERS, this amount is nearly $50M. We cannot see where/how the City has accounted for either 1) the added liability incurred each day our City employees go to work or 2) the increase in our existing obligations due to the negative amortization calculations by CalPERS

We encourage the City to work with the FAC, in particular with the Pension ad hoc committee, to provide a complete and accurate accounting of both current and projected pension debt. In addition, we applaud the fact that FAC work plan explicitly includes providing advice regarding ways in which this debt can be addressed. We hope the City Council and the FAC will work together diligently to find good solutions to this issue. In our minds, this is the single most serious threat to the financial wellbeing of our beloved City.

E.    We appreciate the Council’s approval of adding a part-time person to support staff in assisting the FAC. The FAC had asked for the help of a part-time staff person at their initial meeting in March. The City Manager has expressed his concern about staff workload at each of the FAC meetings. All parties recognized the FAC’s information needs would put a strain on limited City resources. We request that the City Manager proceed with all haste in hiring this person.

We are hard pressed to believe it will take three months to fill this position. A delay of three months will seriously jeopardize timing of the FAC’s work plan. We agree with the suggestion of working through an agency to find a person for this role. 

Failing that, we are aware there are a number of PVE residents, some of whom applied for the FAC but were not selected, who would possibly be interested in volunteering their time in this role.

F.    PVrrg Concluding Observations: From our perspective, The FAC’s presentation at this meeting continued to demonstrate the very high level of professionalism, expertise and seriousness they bring to our City. We believe the Committee’s objectives are well conceived, practical and targeted toward the correct outcomes. 

The “diagnostics” that Mr. McGowan presented, in particular, brought out many of the points that are top-of-mind for PVrrg and, we believe, for the resident community at large. 

In addition, while we do not endorse wasted effort, we would encourage the FAC to review any previous studies or recommendations, and to make some of their own, regarding expenditures on our City Police. It is the single biggest line item in our budget.

We strongly urge the City Council to approve the FAC work plan and to continue its full
support of the committee, including with the resources needed to accomplish their objectives. We are convinced the result will be a set of solid recommendations from the FAC, which we trust the City Council will approve and implement.


Committee Meeting 5: July 16, 2018


For full agenda of the meeting, click here.

For video of the meeting, click here.

For the FAC Draft Workplan, click here.

Minutes are not yet available.


PVrrg Summary of Essential Content:      

The FAC Ad Hoc Committees presented some draft slides and discussed their reports to be presented to Council on Tuesday, 7/24 Joint meeting with City Council.  

Essentially each individual Ad Hoc Committee will do their work between July and September 31,2018, integrate all of the committees work together between October and December 2018, and make the FAC recommendations to Council by December 31.  

Committee Meeting 4: June 14, 2018


  • Discussion of Joint Meeting of the City Council and Finance Advisory   Committee
  • Presentation of OpenGov
  • Ad Hoc Committee Reports

For video of the meeting, click here.

For full minutes of the meeting, click here. Here are the highlights:

The Committee discussed its overall work plan for the rest of 2018 to help the City not only balance the budget, but also to establish long term stability and setting up internal procedures for transparency, engagement, and communication.  This work plan is still in the working stage and is expected to be discussed at the City Council meeting on July 10.  See detail of the FAC work plan for 2018-19 here.

A representative from OpenGov presented their software accounting system for management of City finance, which costs $9,500 for 3 years. 1,800 cities as well as numerous government agencies and educational institutions are using it.  The members of the FAC were impressed with its effectiveness in accounting and financial management as well as its capability in support of transparency and accountability. They would like to see its installation expedited so as to make it available for use by July 1, if possible. David McGowan and Mark Young also recommended that the City hire temporary help familiar with OpenGov to do the necessary transitional work.  For more information on this system, click here.

Next FAC meeting will be on July 24.

PVrrg Perspective:   

We are enthusiastic about OpenGov and believe that the City would be wise to have it installed as soon as possible.  After hearing the presentation by their representative, and then visiting their website, we feel it would be a tremendous help to the management of our City’s finance.  The residents would also have the City financial information and data comparisons from year to year in numerous ways directly at their fingertips. The potential for transparency and accountability is already built in. 

Who wouldn’t want that?

Committee Meeting 3: May 17, 2018 


  • Discussion and Approval of Revenue Ad Hoc Committee Mission and Goals 
  • Discussions and Approval of a Recommendation to the City Council to Include a Monthly Cash-Flow in the 2018-2020 Budget 
  • Discussion and Approval of a Recommendation to the City Council that a Quarterly Budget to Actual Revenue and Expenditure Reconciliation be Provided to the Finance Advisory Committee and City Council 

For video of the meeting, click here.

For full minutes of the meeting, click here. Here are the highlights:

Discussion and Approval of Revenue Ad Hoc Committee Mission and Goals 

The Ad Hoc Committee identified its purpose as exploring and identifying the ways to maximize   City revenue. The following was identified as areas the Ad Hoc Committee will address: 

  • Concessions
  • Investment Income
  • Property Tax
  • New funding sources (sales tax, grants, community sponsorship, exchange rates, and others not known at this time) 
  • The Ad Hoc Committee intends to benchmark Palos Verdes Estates revenue with other similar municipalities.

Discussions and Approval of a Recommendation to the City Council to Include a Monthly Cash-Flow in the 2018-2020 Budget

Action: Approve recommendation that the City Council include a monthly cash flow in the 2018-2020 budget. Motion: Committee Member McGowan. Second: Committee Member Jhaveri. (5-0) 

Discussion and Approvalof a Recommendation to the City Council that a Quarterly Budget to Actual Revenue and Expenditure Reconciliation be Provided to the Finance Advisory Committee and City Council

Action: Approve recommendation that the City Council direct staff to prepare a quarterly reconciliation of budgeted revenues and expenditures in comparison to actual revenues and expenditures, and provide and exception report of variances from the budget. Motion: Committee Member Jhaveri. Second: Committee Member Culler. (5-0)

PVrrg Summary of Essential Content:  

For the first time the FAC passed two recommendations for the City Council to improvetransparency and accountability:

  1. Establish Projected Monthly Cash Flow for the expected expenses.
  2. Staff to prepare monthly, quarterly, semiannually, and annual statements on the Projected Monthly Cash Flow for the City Council’s review to see if the actual expenses are in line with the projected cash flow.  If there are discrepancies, they should be explained and properly authorized  

PVrrg Perspective:

This committee is doing exactly what we had hoped.   We are very delighted to hear these first recommendations from the FAC to the City Council.  We hope the residents will watch the video and seefor themselves.  

What the CC will do with their recommendation is another story.  However, with the transparent way this Committee is operating and the financial shape the City is in, perhaps the Council will have little choice but listen to their advices.

We strongly urge the City Council to accept and direct the staff to adapt these two recommendations.

Committee Meeting 2: April 19, 2018


  • Staff presentation of Overview City Organization, Budget, Expenses and Projected long-Range Fiscal Challenges 
  • Discussion and Approval of Mission and Goals of Ad Hoc Committees 
  • Discussion About Unofficial Results of April 10, 2018 Special Election

For video of the meeting, click here.

For full minutes of the meeting, click here. Here are the highlights:

Operating Budget: The Ad Hoc Committee presented a recommendation for Committee to advise City Council to include a monthly cash-flow in the FY 2018- 2020 budget, and to request that staff provide a quarterly reconciliation of budgeted revenues and expenditures with an explanation of variances to the budget. It was the consensus of the Committee to schedule this recommendation for discussion and approval at the Committee meeting on May 17, 2018. The Ad Hoc Committee reported that its intent, using the FY 2018/19 budget as a base, is to complete a 5-year and 10-year detailed financial analysis and projection by the end of December 2018 for the purpose of educating the City Council and public and to insure the budget is structurally balanced. 

Pension and Benefits: The Ad Hoc Committee presented its mission as being to understand the City’s long-term and short-term pension obligation, and to develop possible courses of action for the long- and short-term. The Ad Hoc Committee reported that it will meet with staff and CalPERS for understanding of the pension and options, and may recommend consultant services similar reports reviewed from the Cities of Salinas and Pacific Grove. 

Capital Improvement, Maintenance and Equipment Replacement: The Ad Hoc Committee presented that its goal is to work with staff for recommendations on infrastructure status, current requirements and future plans; and resolve short- and long-term CIP financial requirements. The Ad Hoc Committee reported that it will first attempt to address the financial requirements by utilizing the expertise of professionals in the community who have existing knowledge of the City and as a cost-saving measure, and if this does not work, consultant services may be necessary. The Ad Hoc Committee identified the value of community engagement (community forum(s)) to identify capital improvement and maintenance needs. The Ad Hoc Committee identified its plan to complete its work for incorporation with the Operating Budget Ad Hoc Committee by the end of December 2018.

Communications and Messaging: The Ad Hoc Committee presented its goal as providing the public with a background orientation to understand the City’s financial records, sources of revenue, Fund Accounting, and liabilities; historical revenue and expense data; and current financial data inclusive of revenue to budget per Fund and expenses to budget per Fund. The Ad Hoc Committee presented a sample concept of a “dashboard”of the Committee’s charter noting how it is disseminated has not been determined; as such, the Ad Hoc Committee explained that its intent with the “dashboard”is to provide a window into the City’s finances and for serving as a forum for the public to ask questions and receive answers. It was noted that performance measures for including in communications would be created. 

FAC Charter.jpg

Revenue Opportunities: It was the consensus of the Committee that Chair Forte will join Treasurer Lozzi on this Ad Hoc Committee, and the Ad Hoc Committee should look at current revenue opportunities, and assets inclusive of preparing a statement that explains why the Palos Verdes Estates revenue situation is unique. The Ad Hoc Committee reported that its goal and focus would be presented at the next Committee meeting

PVrrg Summary of Essential Content:      

There was a long discussion between Tony and committee members on utilizing the expertise of professionals in the community by the Ad Hoc Committee members.  

Tony said that all engagements of the Ad Hoc Committee with the community are supposed to be done only during the Committee meetings in public not in private, claiming that it would prejudice the process.  He said that it is up to the Council to set the resources not the Committee.  He emphasized that the Committee is only in an advisory role.  However, at the end of the meeting, Councilman Davidson instructed the Committee members to enlist help from whatever source they may find useful including their own [spouses].

The FAC approved the recommendation of the Operating Budget Ad Hoc Committee to advise Council to include a monthly cash-flow in the budget and ask staff to keep records and perform quarterly reconciliation for the budgeted revenues and expenses as well as to explain whenever discrepancies occur.  The Committee decided to schedule discussion on this subject and subsequent approval at its next meeting on May 17, 2018.

PVrrg Perspective:    

We are happy with the seriousness and the no nonsense way that the Committee members are trying to understand the City budget so they can find ways to bring our City to financial health. We are very grateful to every member of the FAC for their commitment and dedication to their work on the Committee.

We don’t agree with the City Manager’s apparent non-cooperation at numerous times during the FAC meeting, especially when David McGowan asked for detailed information on City personnel.  Tony stated that it would be too much work, “the staffs are on treadmills”, and won’t have the time to do it until after the budget has been approved in June.  

We are aware of city personnel being involved in other time-consuming activities and tasks.  One example is the Citizens Academy, which uses a lot of staff’s time.  We can’t help but wonder about the City Manager’s priority.  While valuable, is the Citizen’s Academy more important than providing information to the FAC when the City is in dire need of financial advice?  

The members of FAC are experienced financial and management professionals.  It would be very costly for the City to hire 5 financial consultants of this caliber for their professional services.  Plus, when the City has hired consultants in the past, those consultants have required the support of City staff and have received such support.  

We believe the City Manager should demonstrate greater acceptance and willingness to provide necessary information and support to the work of the FAC.

Committee Meeting 1: March 22, 2018


  • City Attorney explains the Brown’s Act requirements
  • Member swearing-in
  • Discuss and define goals and objectives of the Committee based on ordinance 17-727
  • City Staff presentation – Operating budget & Capital Improvement projects, mid-year budget report, etc.
  • Formation of the Ad Hoc Committees

For video of the meeting, click here.

For minutes of the meeting, click here

PVrrg Summary of Essential Content:

There was general discussion of the Committee’s Goals and Objectives.  A sample of points made by individual members are paraphrased as follows:

Don Culler stated that the object of the Committee is to be the “window to the public”.

Amy Forte described the value of a “dashboard”to capture and communicate key metrics demonstrating the City’s financial picture.

Mark Young indicated that he favored looking for structural issues in order to ensure long-term budget sustainability.  He recommended frequent budget reviews and a two step process to 1) look at the status quo to determine if we are able to live within our means, and 2) if not, figure out options and engage in public debate.

David McGowan advocated that expenses not exceed what was budgeted for and Don added that revenue must match expense in the long term.

Ela Jhaveri called for clarity on pension and other benefits costs. 

The Committee determined that five Ad Hoc Committees should be established to address the key issues, with two members for each area as follows:

  1. Communication platforms and messaging to the public: Amy Forte and Don Culler
  2. Operating budget and expenses: Mark Young and David McGowan  
  3. Capital Improvements & Equipment: Don Culler and Ela Jhavari              
  4. Pension & Benefits: Ela Jhaveri and Victoria Lozzi
  5. Revenue Opportunities: Victoria Lozzi and Amy Forte

The committee members requested meeting at least monthly until they become familiar with the details of the City finance so that they can be in a position to give their recommendations. The City Manager stated that the Committee was only approved to meet four times a year.  The Committee members worked with the City Manager to choose the dates for the next few months in order to meet the timing for upcoming budget approval. The City Manager is to ask for Council approval of the meetings.

PVrrg Perspective: 

We are happy with and encouraged by the Committee members’competence, dedication, and determination to learn and to help with the City finance.  

Comments from the Public:

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