City Council Meeting Date: December 6, 2016
To: Mayor and City Council
City Administrator
From: Melanie Lammers, Finance Director
Title
Consider Approving Updated Financial Policies
Body
Action Requested:
The Northfield City Council approves the attached updated financial policies for Conduit Debt, Fund Balance .
Summary Report:
The Finance Subcommittee has been reviewing current policies, and discussing a few new ones as well. Attached are three policies that have been through the Finance Subcommittee. The first two, are current polices we are revising. The third is a new policy the City has not had before.
Conduit Debt Policy - Attached is a red-lined copy outlining the changes. We have a solid policy in place, with the exception of one clause on page 3, section 9. We are proposing removing the clause that allows the administrative fees to be paid on a yearly basis. The fees are not remitted voluntarily; they are billed out by the Finance Department. When there is staff turnover, it is possible the City will not bill or collect the fees. The organizations requesting a conduit financing are able to incorporate the fee into the bonding, so there is no reason not to collect it up front. The second change is removing the clause exempting refunding's of bonds prior to October 2, 2006. There is no reason to have this clause in the policy. If an organization issued conduit bonds through the City prior to 2006, and paid the full administrative fee up front, the policy would exempt them from paying the fee again during a refunding.
Fund Balance Policy - Attached is a red-lined copy outlining changes to the existing policy. The primary changes have been talked about with Council, and Finance Subcommittee and include- on page 2 under #5. Unassigned, we have increased the minimum unassigned fund balance percentage from 40% to 50%. In addition, we have added language to create an additional 1 month expense cushion. Increasing the required reserv...
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