HomeMy WebLinkAbout09/26/2011~~-----·--~-~
BAKERSFIELD
A G E N DA SUMMARY REPORT
REGULAR MEETING OF THE
BUDGET AND FINANCE COMMITTEE
Monday , Septe mber 26 , 2 011
12:00 p .m .
City Hall North -Conference Room A
1600 Truxtun Avenue
Bakersfield , CA 93301
The meeting was called to orde r at 12 :01 PM
1. ROLL CALL
Committee Members:
Russell Johnson , Chair
Sue Benham
Ken Weir
Committee members present : Councilmember Russell Johnson, Chair
Council member Sue Benham
Councilmember Ken Weir
Staff present :
Alan Tandy , City Manager
Rhonda Smiley , Asst . t o the C i ty Manager
Steven Teglia, Asst . to the City Manager
Chris Huot Administrative Analyst
Joshua Rudnick , Deputy City A tt orney
Jessalee Talley , Deputy C i ty Attorney
Nelson Smith, Finance Director
Sandra J i menez , Asst. Finance D i rector
Najir Nur i dan , Police Captain
Georgina Lorenzi, Asst. to the PW Director
Joe Navarro, Rec & Park Bus i ness Manager
2. ADOPT JULY 25, 2011 AGENDA SUMMARY REPORT
Adopted as submitted.
AGENDA SUMMARY REPORT
Budget and Finance Committee Meeting
Monday , September 26 , 2011
Page 2
3. PUBLIC STATEMENTS
None
4. NEW BUSINESS
A. D i scussion and Committee Recommendation Regarding Review of Auditor
Rotation Policy -Smith
Finance Director Nelson Smith provided a brief summary of the City Council
Resolution # 040 -05 , adopted in 2005 , which required a change of auditors no less
than every five years and that the current auditor firm be excluded from the
competitive process for the upcoming audit term. Finance Director Sm i th also
stated that in a recent review of the Government Finance Officers Association
(GFOA) best practices, the GFOA no longer recommends the exclusion of the
current auditor firm from the competitive selection process; especially when the
availability of qualified public sector auditor firms may be limited . Staff will soon
begin a new Request for Proposal (RFP) selection process as the City is currently in
year five of a five year auditor contract commitment. In an effort to provide a
competitive bidd i ng element and not limit the Committee 's options when
selecting a qualified firm for the next auditor cycle, amending the City 's policy
regarding the inclusion or exclusion of the current auditor firm is necessary .
Committeemember Ken Weir asked how many responses are usually received in
r esponse to the RFP and how many notifications are distributed. Finance Director
Smith stated there were two responses received in each of the last two selection
processes since the policy was enacted. There are a total of approximately 15 to
20 notices sent out to various sized firms in Kern County , Los Angeles, Fresno , and
Sacramento areas .
Committeemember Sue Benham stated that due to the small number of f i rms who
participate in the RFP process it would be wise to allow the current firm to be
i ncluded in the upcoming process. Committeemember Benham made a motion
to amend the current policy to allow the current auditor firm to be included in the
upcoming competitive p r ocess .
The motion was unanimously approved.
B. Discussion and Committee Recommendation Regarding Wastewater Revenue
Bond Variable Rate Debt -Smith
F i nance Director Nelson Smith stated Dexia , the City 's liquidity provider , is causing
a rate increase on the City's Wastewater Revenue Variable Rate Bond because
the Belgian-French bank has significant exposure to the governmental debt with
the country of Greece which will possibly be downgraded by the Standard &
Poor 's rating agency which has resu l ted i n lack of interest by investors to hold any
AGENDA SUMMARY REPORT
Budget and Finance Committee Meeting
Monday , September 26, 2011
Page 3
type of bond(s) associated with Dex i a. The bonds have been remarketed, but at
a higher interest rate , from 0 .5% to about 3.0 %. It is a significant difference and
t he additional costs will continue to compound . Finance Director Smith said there
is an option to alleviate the increase in rate to the bond; buy down a portion of
the bond to lower the interest rate on the rema i ning bond and change the
liquidity provider. There is a fund balance in the sewer fund which can be used to
do so .
Committeemember Sue Benham made a motion to have staff prepare a
proposed budgetary act i on to facilitate both the bond call and the change in
liquidity provider for approval by the full City Council
The mot i on was unanimously approved .
5. COMMITTEE COMMENTS
None
6. ADJOURNMENT
T he meeting adjourned at 12 : 14 PM
c c : Honorable Mayor and Cit y Counci l