HomeMy WebLinkAbout2009-1116 Study Session MIN
CITY COUNCIL STUD Y SESSION
November 16, 2009
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MINUTES FOR CITY COUNCIL STUDY SESSION
Monday, November 16,2009
Siskiyou Room, 51 Winburn Way
Mayor Stromberg called the meeting to order at 5 :30 p.m.
Councilor Navickas, Silbiger, Jackson, Voisin, Chapman and Lemhouse were present.
1. Look Ahead Review
City Administrator Martha Bennett reviewed the items on the Council Look Ahead.
2. Discussion regarding what ideas do the Mayor and Council have about the Fiscal Stability
goal.
Financial Director Lee Tuneberg provided the staff report and shared information on the financial
management polices that drive ending fund balances, contingencies, budgets, objectives as well as
accounting methods, budgeting policies, debt service and how to move forward in the future. The
management policies also addressed various fund balances, how the City deals with annual revenue, long-
term revenue, annual operations and long-term infrastructure changes.
Council and staff discussed the definition of fiscal stability and that staff should identifY the priority with
Council prioritizing or making adjustments as necessary. The level of services to provide needed to be
determined as well as funding the services. Staff clarified the City needed to decide what it was trying to
achieve in the community and find out if the actual service provided supported the level of service
required at an affordable price. .
Council expressed concern regarding rate and property tax increases on the CItIzenry, the affect of
Measures 5 and 50 across the State and the need to research rate structures that address the regressive
nature of rate and fee increases. Other points discussed were living within the City's means, providing
too much service and knowing the actual cost of services in order to make educated decisions.
Staff explained the difficulty in quantifYing actual costs of services in the budget process and how the loss
of institutional knowledge due to staff turn over disrupted financial reporting and budgeting.
Council noted the City's large debt service, building reserves, and used the City of Medford as an
example of how maintaining cash reserves has enabled Medford to provide minimum services regardless
of the economy.
Council thought the fiscal situation would get worse before improving and attributed it to major increases
in both health care costs and the Public Employee Retirement System (PERS), sections of the budget
where the only control was eliminating positions and eventual inflation and acknowledged the need to
plan and have a strategy going forward. Other concerns expressed were the impacts to future community
from delaying the capital and deferring maintenance.
Council and staff discussed having a future Study Session on the financial management policy.
Council directed staff to determine the percentage and justification for each fund and have Council make
adjustments if needed.
CITY COUNCIL STUDY SESSION
November /6, 2009
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3. Discussion regarding would the City Council review and update the current investment policy.
City Recorder Barbara Christensen explained how the current policy adopted in 1998 ensured cities had
an investment policy in place that protected the investments as well as the person making investment
decisions. Changes to collateralization, expanding diversification information in the policy to show
percentage per issuers and banking institutions no longer having investment divisions prompted a review
and update to the current investment policy.
Ms. Christensen clarified per policy, investors formerly in the investment divisions of banks now working
for brokerage firms were no longer recognized as primary dealers. Revising the policy would allow the
City Recorder to continue working with the same investors as long as they were a primary dealer of the
Federal Reserve Bank, reported voluntarily to the Federal Reserve Bank New York or affirmed they have
met the security dealers' capital adequacy requirements.
Collateralization was further explained with upcoming changes to the law that will increase insurance
coverage to 'collateralized securities from 100% to 110% making it more expensive for banks to
participate.
Ms. Christensen explained how the Local Govemment Investment Pool has become riskier with
investments valuing at a lesser value which brings the interest rate in the pool down.
Staff discussed with Council changing the annual review to every other year.
Meeting adjourned at 6:55 p.m.
Respectfully submitted,
Dana Smith
Assistant to the City Recorder