City and Borough of Juneau
Finance Committee Meeting AGENDA
January 16, 2002, 5 p.m., Chambers
I. Call to Order
II. Arctic Winter Games Bid Committee Draft Resolution
The Arctic Winter Games are held every two years in a pre-selected area. The hosting schedule includes Greenland this year, Northern Alberta in 2004 and Alaska in 2006. The selection process begins approximately four years in advance of each winter games. A letter of general interest will be sent out in March to all municipalities that might be interested in staging the Games. The letter will detail the general conditions that host communities are asked to assume and request formal indications of an intent to bid be returned. To be selected to host the Games communities must submit a bid by late July or early August 2002 (date to be announced).
III. The FY03/04 Biennial Budget schedule
The Finance Department began the FY03 and FY04 biennial budget process in November. Between the initial development and submission to the Assembly on April 5, a number of steps and reviews are performed. In the packet you will find a schedule showing the key dates for the budget process. These key dates are set by CBJ Code, State Statute and/or State Regulation.
The Assembly will be presented with the budget on April 5, 2002 and must take action on the budget and the mill levy on or before June 15, 2002. Included in the packet is a schedule showing the Finance Committee’s Budget Review Schedule for last year (FY02). The FY03 Finance Committee Budget Review Schedule has not yet been set. We are assuming that the FY03 Finance Committee budget review schedule will include most, if not all, of the items reviewed in the previous year. The Finance Committee needs to decide if it wishes to have other budgetary information presented.
IV. Financial Status Update for the FY03/04 Biennial Budget
On April 5, 2002 the City Manager will be presenting to the Assembly a balanced FY03 and FY04 Biennial Budget. Initial projections indicate that increases in some budget cost areas will make balancing the FY03/FY04 Biennial Budget difficult. Staff will present to the Finance Committee, on Wednesday, some of the more significant budgetary issues anticipated for this year’s budget process.
V. Recommendations for "Mission and Measures” development in FY03 and FY04
During the November 2001 Alaska Municipal League meeting Craig Holtz, Arthur Anderson, gave a budgetary management presentation on “Measurement: Alignment and Use.” Cheryl Frasca, Anchorage OMB, has indicated that Anchorage is interested in bringing Mr. Holtz back to Alaska to provide further budgetary training in this area. She is interested in working with the AML to develop a master service agreement with Arthur Anderson. In order to obtain Arthur Anderson’s services, it will be necessary for Alaska to show a significant financial commitment. In moving in this direction, Ms. Frasca has asked us if we are interested in joining in on this possible training opportunity. A suggested budgetary development approach would include adding staff training funds to the FY03 budget with a goal of developing budgetary “Mission and Measures” starting with the FY04 budget. Before proceeding in this direction we are seeking Finance Committee interest in developing a “Mission and Measures” approach to the budget process and adding training funds to the FY03 budget.
VI. Communities Purchasing Program
Government jurisdictions are increasingly joining together through cooperative purchasing arrangements to streamline procurement processes and to reduce the cost of purchased products. These programs pool the buying power of public agencies to obtain bulk volume discounts on name-brand commodities. Through the volume discounts, small public agencies can receive contract pricing which they might not achieve on their own. Cooperative purchasing alliances also help local agencies reduce workload related to bid and contract development. U.S. Communities Government Purchasing Alliance (GPA) is one example of such an alliance among local jurisdictions, jointly sponsored by the National Association of Counties, National Association of Governmental Purchasing, National League of Cities, and the US Conference of Mayors.
While bidding is done on a national level, on behalf of local communities, actual procurement occurs at a local level, through manufacturer’s distributors. This ensures that whenever possible, local merchants benefit from the City’s purchases. Allowing for the provision of Cooperative Purchasing with government alliances will require a modification to the CBJ Purchasing Code. Staff will present to the Finance Committee, on Wednesday, a short overview of this program. Additional information is available at www.uscommunities.org.
VII. Recommendations on Investment Portfolio Management
In 1996-97 the Finance Committee, with the assistance of Callan Associates, reviewed the CBJ’s Central Treasury’s fixed income investment program. This review included an update in our investment code and policy and the selection of an external investment manager, Northern Trust. Investment term limits were set for internal and external portfolio management. Recent market trends have resulted in a term limit investment gap (yield curve flat spot) between our internal and external investments. The available market investments limit the internal portfolio to lower yielding and lower risk investments and our external portfolio to higher yielding and higher risk investments. Staff is recommending we develop a mid-term investment option to reduce our external market risk while still providing reasonable investment yield options. Staff will present information explaining the yield curve flat spot and the investment options available.
The Finance Committee may also consider hiring an external investment consultant to review our investment strategies. The original investment plans noted that we would need a minimum of five years with the external investment manager to determine the net benefit. We are now approaching that five-year mark. I have contacted Callan Associates to determine their interest in performing a follow up review and the cost. A letter from Ruthann Moomy, Vice President Callan Associates, is contained in your packet.
VIII. Information items –
a. League of Women Voter’s Survey
The League of Women Voters is proceeding with the “City and Borough of Juneau Budget Survey.” Final drafts of the survey were distributed on January 11, 2002. A copy of the survey is enclosed in your packet.
b. Harbor Board Port Fee Recommendations Status
The Harbor Board has indicated an interest in have the CBJ continue with the port fee to help fund harbor projects. A letter from Mr. Joe Graham, Port Director, explaining the Harbor Board’s interest and position regarding the port fee is enclosed in the packet. The Mayor has appointed a committee to work with the industry. The Committee will be meeting with the cruise ship industry during the next week.
c. Passenger Fee Project Recommendations and Status
The Passenger Fee Committee has met several times during the past few months to develop a list of project recommendations. They will be meeting again on January 17 to finalize the project list for submission to the Assembly. The project listing they are developing will list projects by priority. Dave Palmer, City Manager, will provide information on the Committee’s process and status during the meeting.
d. Year Ended June 30, 2001 Financial Reports
The FY01 financial reports and annual audit have been competed. In the packet materials you will find a cover letter and copies of the financial reports. Staff will present to the Finance Committee, on Wednesday, a short overview of the various financial reports.