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2020 02 12 FAC Minutes FINANCIAL ADVISORY COMMISSION MINUTES 1 FEBRUARY 12, 2020 REGULAR QUARTERLY MEETING FINANCIAL ADVISORY COMMISSION MINUTES WEDNESDAY, FEBRUARY 12, 2020 CALL TO ORDER A regular quarterly meeting of the Financial Advisory Commission (Commission) was called to order at 4:00 p.m. by Chairperson Mills. PRESENT: Commissioners Batavick, Hoffner, Hunter, Rosen, Twohey and Chairperson Mills ABSENT: None VACANCY: One PLEDGE OF ALLEGIANCE Commissioner Hoffner led the audience in the Pledge of Allegiance. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA – None CONFIRMATION OF AGENDA Finance Director Romero requested that Partnership Specialist Doug Hassett, from the Department of Commerce with the U.S. Census Bureau, give a presentation on the 2020 Census under Announcements Presentations, and Written Communications. The Commission concurred. ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS Partnership Specialist Hassett, from the Department of Commerce with the U.S. Census Bureau, Los Angeles Regional Census Center, gave a presentation on the history of the US Census Bureau; explained the purpose and use of data collection; gave a brief overview on how to participate in the 2020 Census and why it is important. CONSENT CALENDAR ITEMS 1. APPROVE MINUTES DATED NOVEMBER 13, 2019 2. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED SEPTEMBER 30, 2019 3. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED OCTOBER 31, 2019 4. RECEIVE AND FILE REVENUE AND EXPENDITURE REPORT DATED NOVEMBER 30, 2019 REPORT AND INFORMATIONAL ITEM NO. FINANCIAL ADVISORY COMMISSION MINUTES 2 FEBRUARY 12, 2020 REGULAR QUARTERLY MEETING 5. RECEIVE AND FILE THE SECOND QUARTER 2019/20 TREASURY REPORTS FOR OCTOBER, NOVEMBER, AND DECEMBER 2019 Financial Services Analyst Hallick explained the cashflow cycles pertaining to the City’s revenue and expenditures. General discussion followed regarding the approximate 2% investment portfolio rate of return and specific returns by investment type; the decrease in market values for investments; and how the numbers shown for revenues and expenditures are a total budget and not a year-to-date. Staff explained the yield to maturity to equivalent found on the front page of the investment portfolio, standard delays that occur when receiving revenues, payment cycle for expenditures, and the potential mid-year adjustments that relate to investments. Motion – A motion was made and seconded by Commissioners Rosen/Hoffner to approve the Consent Calendar, as submitted. Motion passed: ayes 6, noes 0, vacancy 1. BUSINESS SESSION 1. RECEIVE AND FILE FISCAL YEAR 2019/20 MID-YEAR BUDGET REPORT Finance Director Romero presented the staff report, which is on file in the Finance Department. The Commission and Staff discussed the causes for short-term vacation rental transient occupant tax adjustments after the annual budget is adopted; the pension trust liability in the General Fund reserves and its current deficit. Staff explained that the performance portfolio for the pension trust is passively managed by Public Agency Retirement Services (PARs), which was the investment strategy recommended by an FAC subcommittee. General discussion followed regarding the process for budget adjustments within a fiscal year; project consultant grant reimbursements; and the City’s reorganization, newly formed Public Works Division, and its efficiencies. Motion – A motion was made and seconded by Commissioners Batavick/Hunter to receive and file Fiscal Year 2019/20 Mid-year Budget Report, as submitted. Motion passed: ayes 6, noes 0, vacancy 1. STUDY SESSION 1. HIGHWAY 111 CORRIDOR AREA PLAN (Plan) Planning Manager Flores and Design and Development Director Castro presented the staff report, which is on file in the Finance Department. General discussion followed regarding the possibility of creating golf cart lanes on the North side to connect the Highway 111 Corridor with the proposed cultural trail; process of funding mechanisms and allocating funding for business improvement districts; City design and implementation guidelines; process for allocating the budgeted yearly Measure G funds for the Plan; other possible funding sources such as partnerships with local businesses to share the costs, CV link, and exploring grant opportunities; status of FINANCIAL ADVISORY COMMISSION MINUTES 3 FEBRUARY 12, 2020 REGULAR QUARTERLY MEETING the dealerships’ sign program and the City’s contribution for the signs; and the cost and concept of the vision for the Highway 111 Corridor. The Commission requested Staff provide a quarterly update on the Plan implementation and how Measure G funds are being used. Staff agreed and mentioned that the Commission can recommend some parameters or priorities for the allocation of Measure G funds within this Plan. 2. COMMUNITY WORKSHOP RECAP Finance Director Romero presented the staff report, which is on file in the Finance Department. The Commission and Staff discussed the City’s general plan and the relevance to the identified priorities from the 2020 Community Workshop. Staff provided the Commission with the updated 10-year General Fund revenue and expense projections. Commissioner’s that attended the workshop provided thoughts and commented how the workshop was well organized. The Commission commented that having a workshop provides testimony to the City’s great civic engagement and thanked staff for continuously providing the Commission with updates on the 10-year General Fund projections. DEPARTMENTAL REPORTS Staff provided an update on all departmental report items, which are on file in the Finance Department. 1. THIRD QUARTER 2019 (JULY – SEPTEMBER) SALES TAX UPDATE FOR THE CITY OF LA QUINTA General discussion took place on the top 25 businesses contributing to Bradley Burns and Measure G sales taxes. The Commission suggested having a 3-year comparison for the sales tax update. Staff said it is done internally and explained that what is provided to the Commission are actual numbers, which are more relevant in the financial statements. Further discussion followed on how actual revenues are tracked by Finance; a comparison of different sales tax quarters; and how property tax designations have recently changed. COMMISSIONER HOFFNER LEFT THE MEETING AT 6:00 P.M. 2. UPDATE ON THE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR YEAR ENDING JUNE 30, 2019 Staff announced that the Comprehensive Annual Financial Report (CAFR) for year ending June 30, 2019 is scheduled to be presented to Council on February 18, 2020 and the City’s contracted auditing firm and Staff will present the CAFR to the Commission at a special meeting on March 18, 2020. FINANCIAL ADVISORY COMMISSION MINUTES 4 FEBRUARY 12, 2020 REGULAR QUARTERLY MEETING The Commission and Staff discussed the causes for an extension to file the CAFR; requirements for obtaining an extension; the steps staff is taking to prevent filing extensions in the future; and the most significant items included in the CAFR. 3. UPDATE ON THE ADOPTED DEVELOPMENT IMPACT FEES PURSUANT TO THE 2019 DEVELOPMENT IMPACT FEE (DIF) STUDY Staff said Council approved the Development Impact Fees (Fees) to the 2019 DIF Study during the February 4, 2020 Council meeting implementing a 2-year phased in approach with no discount of any of those fees after the 2-years. Further discussion followed regarding the adopted Fees. 4. FINANCE DEPARTMENT CURRENT AND FUTURE INITIATIVES Staff provided an update on the implementation for new banking services. General discussion followed on the activities listed on the staff report that are performed by the City’s Finance Department in addition to their daily required operational responsibilities. COMMISSIONERS’ ITEMS The Commission inquired about topics that would be discussed during the Commission’s special meeting scheduled on March 18, 2020. Staff said the major items would be the CAFR, preliminary proposed Capital improvement Project budget, and the preliminary General Fund budget projections. Staff mentioned that an update on the private Silver Rock Development project would be requested for City Council with a discussion to follow at a future Commission meeting and the progress of the SilverRock event space can be found on the City’s website at https://www.laquintaca.gov/about-us/news-press- releases under Items of Interest for the City. ADJOURNMENT There being no further business, it was moved and seconded by Commissioners Twohey/Rosen to adjourn this meeting at 6:34 p.m. Motion passed: ayes 5, noes 0, absent 1 (Hoffner), vacancy 1. Respectfully submitted, Jessica Delgado, Management Assistant City of La Quinta, California