Finance Highlights 2006 0905 - Laserfiche WebLink

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In response to the Mayor's question regarding the use of Asset Seizure Funds, City Manager Jermanis explained that the Police Department uses it for items that require aone-time funding source. In response to the $8.3m ending budget amount noted by Starosciak in the Summary of Revenues, Expenditures and Fund Balance report, Baloca explained that the projected fund balance is actually higher as presented than during the budget process. Baloca also clarified that City's reserve policy is 20% of expenditures and that the total projected year-end reserves were projected close to $13.Sm during the budget process, which is higher than budget. Budget adjustments will be forwarded for City County approval. 3. Review of the June 30, 2006 Quarterly Investment Report Baloca reported that the City's investment portfolio, as of June 30, 2006, had a market value of $73.2m, which represents a decrease of $2.2 million from March 31, 2006. The City's investments with LAIF account for 40% of the City's total investments. The investment portfolio managed by Chandler had an average book yield of 3.83%, an increase from 3.53% on March 31, 2006. Baloca explained that the 5-year treasury has dropped to 4.73% from 5.23% last June and that short-term investments continue to provide a higher earning yield than long-term instruments. As a result, staff has modified the City's strategy of not only purchasing short-term investments to gain liquidity and maintain a higher yield but to also purchase in the long-term to secure rates in the current environment where rates have recently dropped. As of June 30, 2006, the LAIF yield of 4.53% continues to exceed the City's earnings of 3.83% on Chandler's portfolio. The City will continue to evaluate upcoming maturities and its reinvestments with LAIF, Chandler Asset Management, or other investment managers. Baloca informed the Committee that overall the City has gained in its relationship with Chandler as compared to LAIF; however, our portfolio with Chandler has resulted in a loss over the last three quarters when compared to LAIF. Ideally, Baloca would like staff to have the ability to obtain purchase offers from different brokers rather than just one advisor, which will provide some assurance that Chandler's proposals remains competitive with the current market. Baloca replied that scheduled conference calls occur every two weeks in response to the Mayor's question regarding how much staff time is spent on managing the investment portfolio. Discussion on the City's investments and Chandler's performance will be included on the agenda for the next Finance Committee meeting. 4. Discussion of Single Family Residential Exemptions from the Business License Tax Baloca explained that the Finance Department currently reviews requests for penalty waivers and may make reductions based on the validity and circumstances of the complaints. Baloca provided some background on alternatives that were discussed with the City Attorney for exempting rentals made to related parties. One option was to create a defmition for families and extended families, and craft an exemption for rentals made to both relationship categories. The concern with this alternative is that it could be considered as discriminatory since the definition of family is legally broader. Another option considered was exempting all rental property owners that have