HomeMy WebLinkAboutMinutes - Finance Committee - 10/19/2009 -C.Finance AdministrationIV~215N MasonIa2MFloorI-Ort CoLLins Fort Collins,CO 80522
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Council Audit ft Finance Committee
Minutes
10/19/09
10:30a.m.12:00p.m.
Council Attendees:Mayor Doug Hutchinson,Mayor Pro Tern Kelly
Ohison
City Staff Attendees:Darin Atteberry,Mike Freeman,Chuck Seest,Jim
O’Niell,Kraig Ecton,John Voss,Harold Hall,
Heather Shepherd
Others:John Knezovich,citizen ,Ann Hutchison,Charnber
of Commerce,Garry Bostwick and Bob Smith,
Wells Fargo
Approval of the Minutes from the September meeting.
Ben Manvel moved to approve the September minutes and Doug Hutchinson seconded the
motion.The minutes were approved unanimously.
Update to Investment Policy
Harold Hall updated the Committee on one change to the investment policy,which is to increase
the allowable maximum investment for the government sponsored agency securities category
from 80%to 90%.This change would strengthen safety and yield as the City’s alternative
to government sponsored agency securities is the corporate market,which is more
volatile and has greater exposure to the uncertainty of the economy.This change would
not impact liquidity since a daily market exists for government agency investments.
This item will be coming to the full Council for a vote later this year.
Sales Tax Update
Chuck Seest summarized data showing that the City is down nearly 8%in sales tax
collection (September collections for August activity).
>4th Qtr of 2009 will meet /slightly exceed projection (4%)
V During 2008,4th Qtr was weak due to financial crisis.
V Vehicle sales have started to recover beyond ‘Cash for Clunkers”
V Anticipate a 13th month payment from major Food Store Vendor
>Confident of the Year-to-Date projection (4%)
V Barring unforeseen events,consumer confidence improving
V With 9 months in the books,hard to move YTD trend
$~~LLins
Investment -Amendment to Securities Lending Agreement
Representatives from Wells Fargo presented information on how the City can stay
involved in Securities Lending while mitigating risks.This would require amending the
current agreement between the City and Wells Fargo.
Managing Investment Risk
Investment Selection Process
•Title 24,Article 75 —Colorado Statute
•Only purchase fixed income or cash market securities that meet quality standards
•Issues and issuers reviewed and pre-approved through proprietary Wells Fargo liquidity
management process
•Collateral investments strictly limited to US Government issues,Repurchase
Agreements,Commercial Paper,and AAA rated money market funds.
•Strict Maturity,Ratings,and Diversification limits
•Minimum A-i/P-i short-term AA-long term ratings
•Maximum maturity of any investment limited to 270 days
•5%issuer limit
•Maximum 25%exposure limit for commercial paper
Emphasis on risk management
•Focus on intrinsic value of lending
•Strategic utilization of lendable secur ties
This item will come to City Council as a resolution approving the City’s participation in
securities lending under the amended agreement.
U~date on Purchasing Items
Jim O~NeiLL some foLLow up information reLated to some Council Finance Questions on how
the.City bid process works,how proposaLs and bids are evaluated,how cost is used to
•evaLuate Requests for ProposaLs,and data on P-Card Spending for the Last year.
KeLLy OhLson asked if purchasing reguLates the products that are bought to ensure they are
‘green’.
•Jim O’NeiLL,Mike Freeman,and Darin Atteberry gave several of examples of how purchasing
definiteLy is directed in a way the City prefers,however,at this time,Purchasing is not a
•..gatekeeper on aLL spending and does not tel].departments what they can or cannot buy.
Jim O’Neill stated that Purchasing is continualLy working on improvements,especially in the
green purchasing area.Going forward,Darin suggested a pLan wouLd be to determine how
Council can get reports on what progress and improvements are being made.
Kelly OhLson asked if the CounciL couLd obtain a summary follow-up report on major projects.
Projects like the AztLan Center,PoLice Building,Spring Canyon Park,etc.)
Darin Atteberry aLso requested data on what our benchmark Cities are doing to eliminate cost
in Request for ProposaL processes.Doug Hutchinson requested that this data is viewed in
context,not just on it’s own.
Staff agreed to provide information on the topics mentioned.