HomeMy WebLinkAboutCity Council Committees - Operations - 03/08/1995 I
OPE WTIONS COMMITTE IW41NUTE S
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' MAACH 8, 1995 '
COMMITTEE MEMBERS PRESENT: Jon Johnson- Chair, Leona Orr, Christi Houser
STAFF PRESENT: John Hillman, Charlie Lindsey, Brent McFall, May Miller, Kelli
O'Donnell
MEMBERS OF THE PUBLIC: None.
The meeting was called to order at 9:32,a.m. by Chairperson Johnson.
Approval of Vouchers All claims for the period ending February 28, 1995,in the amount of
$1,568,715.59 were approved for payment.
City Hall Remodel -Acceptance & Release of Retainage
Finance Division Director May Miller reviewed the agenda materials with the Committee. She
noted that the final cost excluding phone expenses was $37.66 per sq, f. which included
updating the heating, air conditioning and lighting. Miller noted that the new systems are
expected to be more efficient. She explained the remodel included the Council Chambers and
all of the offices at City Hall. Charlie Lindsey informed the Committee that the problems with
the Chambers had been worked out.
May explained that the project was$27,738 under budget although after retainage is paid only
$797 will be returned to the capital improvement fund. May explained that$70,000 had been
lost on the Puget Power grant due to timing. Committeemember Orr moved to accept the City
Hall Remodel and authorize the release of retainage. Committeemember Houser seconded and
the motion passed 3-0.
Extension of Banking Service Contract
May Miller stated that U.S. Bank has agreed to continue the rates established in 1990 for one
more year. She noted that she had checked with other cities and the rates are very good in some
areas and seem to be competitive overall. Miller explained that Seafirst and other local banks
are included in bids for investments. Options for local financing of LID bonds are also being
researched. May noted that the cost of changing banking service is also a factor since so much
is done through wire transfers now there would be costs involved in changing banks.
May recommended that the banking agreement with U.S. Bank be extended for one more year.
Orr moved to accept the recommendation and authorize the extension of the banking contract
with U.S. Bank for one year. Houser seconded and the motion passed 3-0.
Added Item - Review of Investments
May Miller stated that since some questions had been raised at the Council meeting she wished
to review the City's investments with the Committee. May distributed handouts outlining the
City's investments. She explained that derivatives are very complex investments and that she
had been receiving information on the Orange County situation which is useful for analyzing
what not to do and how to guard against a similar situation here. She explained that some
governments are under pressure to earn more with their money and some states required
investments using leverage,particularly California.
The only investment Kent has that are remotely close to derivatives are cAllables which have
a set point that the investment is called and puts you in a position to reinvest at lower rates. She
informed the Committee that the Firemen's Relief and Pension Board has some mutual funds
OPERA.TI NS COMMITTEE MINUTECont.'
MARCH 8, 1995
that are not highly rated which they authorized to be sold at their last meeting.-Ding further
discussion May noted that only 4% of Kent's investments are in the call pool which is a very
small percentage. Director of Operations Brent McFall stated that derivatives have,a bad name
but the main reason for Orange County failing is they had borrowed to make an,investment in
a derivative which is not a good investing practice. May agreed and added that the City does
not borrow. After further discussion,May stated that the City is very conservative ia investing
which means a lower interest rate which is a trade off for more secure investrnenti.
May introduced John Hillman to the Committee explaining that he will be Acing Finance
Director while she is in China.
There being no further business, Johnson adjourned the meeting at 9:55 a.m.
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