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HomeMy WebLinkAbout2010-05-18 Finance and Safety MinutesFINANCE AND SAFETY COMMITTEE Meeting Minutes May 18, 2010 5:00 p.m.; Conference Room #3 PRESENT Councilmembers: De'Sean Quinn, Chair; Allan Ekberg and Kathy Hougardy Staff: Shawn Hunstock, Mike Villa, Peggy McCarthy, Nick Olivas, Gail Labanara and Kimberly Matej Guest: Chuck Parrish CALL TO ORDER: Chair Quinn called the meeting to order at 5:00 p.m. I. PRESENTATIONS No presentations. City of Tukwila Finance and Safety Committee II. BUSINESS AGENDA A. Investment Policy As an information only item, staff provided the quarterly update to the Committee regarding investment reports relative to the requirements set forth by Finance Policy 03 -17. Peggy McCarthy reported on the City's state of affairs regarding investments, and distributed an updated Investment Portfolio Summary as of March 31, 2010. She pointed out an attachment in the Committee agenda packet which includes a glossary of terms. This information should assist Committee members in better understanding the terminology associated with investments. Some components of the portfolio as of March 31, 2010, have changed. The City increased its fixed term investments from $9.5 million to $15.5 million. This change will offer a better return while still maintaining ample liquidity. Peggy distributed several additional cash and investment reports to the Committee that were not included in the agenda packet; one of which was the 10 -Year Trend Analysis. Although the 10 -year weighted average yield is 3.71% on cash, cash equivalents and investments, the 2010 yield is estimated to be 0.77 which is significantly lower that past years. Peggy mentioned that she is also working on a re write of the investment policy to allow for some longer term investments. Currently, the City has no maturity greater than four years. The new policy could include suggestions such as up to five years maturity for 80% of the portfolio and up to ten years for 20% of the portfolio. Longer maturities could lead to strengthening the City's yield and increasing returns. Staff will return to a future Committee meeting when the policy is ready for review. INFORMATION ONLY. B. Minimum Government Fund Balance At the previous request of Committee Chair Quinn, and as an information only item, Peggy McCarthy gave the Committee an overview of the recommended minimum fund balance the City should maintain in order to meet the cash flow needs (under regular and variable circumstances). The City's current reserve policy calls for a minimum reserve balance of 17% of the City's annual general fund revenues. The Government Finance Office Association (GFOA) calls for a similar minimum balance which is no less than two months, or 16.7 of general fund revenues or expenditures. The City's reserve fund will be adequate when fully funded; however, the current balances in the CIP Attachment A fall below these standards. Based on GFOA guidelines, as well as the City's reserve policy, Peggy's Finance Safety Committee Minutes May 18. 2010 Paae 2 professional conclusion is that the $3 million minimum balance required by Finance Policy FP -7 for the CIP should be increased. INFORMATION ONLY. C. Sales Tax Renort Shawn Hunstock reviewed sales tax revenue through February 28, 2010. Receipts for February continued to be below budget estimates. Sales receipts were down over 30% for the year from budget estimates. The City received a streamlined sales tax mitigation payment in the amount of $312,000 which is included in the sales receipts totals. A mitigation payment in this same amount will be received quarterly. As a result of the continuous decrease in sales tax receipts, Finance staff will be reducing the budget revenue as appropriate. State data is suggesting that retail sales increased for the month of March; hopefully, we will see increase when receipts are in. INFORMATION ONLY. D. 2010 1S Ouarter Resorts The Committee reviewed the status of program goals as outlined in the 2010 1S Quarter Report, and asked clarifying questions as appropriate. Committee Member Ekberg requested that more detail be provided under the City Attorney section in lieu of reporting status' as on- going. INFORMATION ONLY. III. MISCELLANEOUS The Committee requested a schedule of important/key dates that would lead up to and meet the requirements of adding a measure to the election ballot. Meeting adjourned at 6:00 p.m. Next meeting: Tuesday, June 8, 2010 5:00 p.m. Conference Room #3 .1. Committee Chair Approval Minutes by KAM. Reviewed by SH.