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HomeMy WebLinkAboutMinutes - Finance Committee 05/26/2020MINUTES MEETING OF THE PALM DESERT FINANCE COMMITTEE (VIRTUAL MEETING) Tuesday, May 26, 2020 CALL TO ORDER Chairman Leo called the meeting to order at 10:00 a.m. ROLL CALL All present participated teleconference. Present: Robert Leo, Chair Karen Alexander, Member Mayor Gina Nestande Mayor Pro Tern Kathleen Kelly Absent: Russell Campbell, Vice -Chair Also Present: Lauri Aylaian, City Manager Janet M. Moore, Director of Finance/City Treasurer Jose Luis Espinoza, Assistant Finance Director Thomas Metz, Deputy City Treasurer Anthony Hernandez, Senior Financial Analyst Derek White, General Manager - Desert Willow Golf Resort Patty Leon, Recording Secretary IR -7T.1 0101LiIi�il1F1ZILet ffelI&I IV. APPROVAL OF MINUTES A. MINUTES OF THE ADJOURNED MEETING OF FEBRUARY 11, 2020 MOTION was made by Member Nestande to approve the Minutes of the adjourned meeting of the Palm Desert Finance Committee held on February 11, 2020. Motion was seconded by Member Alexander and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. V. NEW BUSINESS A. REPORT ON CITY INVESTMENT SCHEDULE AND SUMMARY OF CASH FOR JANUARY, FEBRUARY, MARCH AND APRIL 2020 FINANCE COMMITTEE MINUTES MAY 26, 2020 Thomas Metz provided a summary of the reports stating that for the period ended April 2020, the book value was approximately $260.8 million and the yield to maturity was approximately 1.12%. Lauri Aylaian asked about the effective rate of return and its expectancy. Mr. Metz replied that the federal rates are close to zero. There are risks with banks accepting large deposits and if considered long term the banks may begin accessing negative interest rate charges. There is a legislative bill that would allow local agencies to buy zero interest accrual securities at par. Ms. Aylaian asked if the City has had negative interest charges before; Mr. Metz replied no, it has not happened in the United States before. MOTION was made by Member Alexander to recommend that the City Council receive and file the City Investment Schedule and Summary of Cash Reports for January, February, March and April 2020. Motion was seconded by Member Kelly and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. B. STATEMENTS FOR LOCAL AGENCY INVESTMENT POOL ACCOUNT FOR JANUARY, FEBRUARY, MARCH AND APRIL 2020 Thomas Metz reported that the increase in the pooled investments is due to an $8 million deposit from the proceeds of a maturity in commercial paper. MOTION was made by Member Alexander to receive and file the reports for Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP), and Riverside County Investment Pool for January, February, March and April 2020. Motion was seconded by Member Nestande and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. C. FINANCIAL REPORT FOR CITY OF PALM DESERT THROUGH APRIL 2020 Janet Moore provided an overview of the reports stating sales tax and TOT are down from the prior year due to the cancellation of major events such as the tennis tournament, Coachella and Stagecoach. She noted that the actual revenue estimate for this year has dramatically decreased compared to last year's actual revenue. She stated that it has been difficult to predict sales taxes given that the legislature took an action to allow smaller business to defer sales taxes to July 2020. It is quite possible that the City will not recognize those monies until after the fiscal year end books are closed 2 FINANCE COMMITTEE MINUTES MAY 26, 2020 impacting both years. She further noted that at the July meeting the Committee will only see preliminary sales tax numbers since the information is two months old by the time the City receives it. Councilmember Kathleen Kelly complimented the City for managing its expenses and asked Ms. Moore to provide a brief explanation for those expenditures. Mrs. Moore stated that the largest expenditure is public safety and the delivery of government services. Other non -essential expenses have been placed on hold. As an example, the City Council had authorized an additional payment to CaIPERS however, when the closures took place staff decided to delay the payment until more was known about how long the closures might last. Member Bob Leo complimented Mrs. Aylaian on the recent public news agencies projected losses. He asked if the City has a handle on how much of an impact this is going to have in dollars. Mrs. Moore reported that the current year's budget is looking at an $8 million loss in revenue. The gap between revenue and expenditures is estimated at $6 million. Staff still anticipates receiving some revenue from sales tax and TOT, however, it is possible that those revenues will not be recognized until the next fiscal year depending on when they are received. MOTION was made by Member Alexander to receive and file the financial report for the City of Palm Desert through April 2020. Motion was seconded by Member Nestande and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. D. FINANCIAL REPORT FOR PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT THROUGH APRIL 2020 Anthony Hernandez provided a summary of the report through April 2020. Lauri Aylaian stated that a Parkview tenant had requested a two -month relief and asked if other tenants requested relief as well. Mr. Hernandez replied no. Councilmember Kathleen Kelly referenced the budget for tenant improvements and asked of any upcoming expenses. Mr. Hernandez stated that the tenant improvement budget is expected to be spent in June at the State of California Rehabilitation suite; the Public Works 3 FINANCE COMMITTEE MINUTES MAY 26, 2020 Department will oversee the improvements and are currently in the process of seeking bids. Member Karen Alexander questioned if the San Pablo project under construction is planning to resume. Mrs. Aylaian reported that the San Pablo project, near Highway 111, is expected to be complete sometime in June. The project was scheduled to be done in May but there were delays due to COVID-19. MOTION was made by Member Alexander to receive and file the financial report for the Parkview professional office buildings through April 2020. Motion was seconded by Member Nestande and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. E. FINANCIAL REPORT ON DESERT WILLOW GOLF RESORT THROUGH APRIL 2020 Derek White provided a summary of operations through April 2020 stating that due to the closures in the middle of peak season, revenues dropped over a million dollars compared to prior years. Golf officially reopened on the 23rd of April only to potentially close again. For the month of May, Desert Willow is running about 50% in revenues compared to last year for Golf. The food and beverage is still not at full capacity; out of 140 employees, 100 were furloughed. Councilmember Kathleen Kelly complimented Mr. White for resourcefulness and flexibility. Councilmember Gina Nestande concurred. MOTION was made by Member Alexander to receive and file the financial report for the Desert Willow Golf Resort through April 2020. Motion was seconded by Member Nestande and carried by a 4-0 vote, AYES: Alexander, Kelly, Nestande, and Leo; NOES: None; ABSENT: Campbell. VI. CONTINUED BUSINESS None. VII. OLD BUSINESS None. VIII. INFORMATIONAL ITEMS A. COMMITTEE MEMBER COMMENTS 4 FINANCE COMMITTEE MINUTES MAY 26, 2020 Member Bob Leo asked about opening of the Aquatic Center. Lauri Aylaian stated that the Governor has not opened facilities such as aquatic centers or provided guidelines in which to operate. We are currently in stage 2 and hoping that aquatic centers are in the next stage. Member Leo asked if a survey has been done with businesses in Palm Desert in terms of opening or permanently closing. Mrs. Aylaian replied that a survey has not been conducted given that things are changing so quickly. There is no requirement for businesses to let the City know when they will reopen. Councilmember Kathleen Kelly stated that three budget study sessions took place as well as several City Council actions related to the budget. Staff has been wonderfully resourceful managing this crisis, not only looking for places to trim but also looking for where we need to spend strategically so that we are better prepared for emergencies like this in the future, while making sure that the essential public services are sustained. Janet Moore stated that the City has had a consistent philosophy for many years in terms of being conservative and always looking forward. Two years ago, the City Council adopted a reserve policy wherein staff analyzed the risks to the City, its needs and the long term goals. The Council committed monies for things such as this exact situation and its proving that it was necessary to weather this storm. B. REQUEST TO ADD POTENTIAL ITEMS TO UPCOMING AGENDA Member Karen Alexander expressed concern for those businesses having difficult times and asked if any aid from the City is being offered. Councilmember Kathleen Kelly asked that a brief presentation be given to the Committee at their next meeting about the results of the City's new financial support program for businesses. IX. ADJOURNMENT The meeting was adjourned at 2:40 p.m. to the next regular meeting of July 28, 2020. Respectfully submitted, Patty Leon, Recording Secretary 5