Finance Highlights 2006 0301 - Laserfiche WebLink

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Baloca further explained that the one-time repayment of the City's 03-04 VLF loan to the State will be placed in reserves to offset last years 2004-05 $1.9 million deficit and extend the time that reserves can be drawn upon. With future sales tax and interest rate revenues unclear, Mayor Young suggested that the $575K Kaiser transfer tax be redirected to reserves. Stephens verified that the $1.38 million vehicle license fee money and Kaiser $575K transfer tax are one-time receipts Jermanis pointed out that this is the last year that the City will contribute $1.2 million to the State as a result of Proposition IA. Starosciak questioned the increase of overtime for fire services, since their annual budget was increased by another $600K. Her recollection was that the budget increase was to include additional people and eventually reduce the amount of overtime. Both Young and Starosciak requested a clear understanding of what mandatory overtime entails. Hollister was asked to verify why the City has to pay additional overtime and if it can be automatically added to the Alameda County Fire contract. . 2. Discussion Regarding 2005-06 Mid -Year Budget Adjustments Rodriguez explained staff s recommendation to formally approve the mid -year budget amendments, which include all adjustments made after the 2005-06 budget was originally adopted in June 2005. The following schedules where brought forward for review: Schedule A: Summary of year-end budget adjustments by fund. Schedule B: Detail expenditures and revenue adjustments and specific funding sources. Schedule C: Summary of revenues and expenditures by fund after the City's mid -year budget review. Jermanis suggested finding a way to automatically increase the carryover revenues along with the matching expenditures for the new fiscal year for all projects and grants, which will reduce Council's need to review previously approved items. Jermanis also reported that the City is now responsible for recording the financial transactions of the LINKS program. 3. Discussion Regarding Investment Report Finance Director Baloca reported on the performance of the City's investments as of December 31, 2005. The City's investment portfolio had a market value of $48.4 million, an increase of $320K from September 30, 2005. The City's LAIF investments account for 18.2% of the City's total investments. The investment portfolio managed by Chandler Investments had a December 31, 2005 average book yield of 3.40%, an increase from 3.28% on September 30, 2005. The average maturity of investments with Chandler are 2 1/2 years with a maximum maturity of 5 years. Baloca reported the recent change in strategy to reinvest back into LAIF (shorter -term investment) as Chandler investments mature. The change in investment strategy reflects the current Treasury rate environment where shorter -terms yield are exceeding longer -term rates.