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MINUTES OF THE SPECIAL WORK SESSION <br /> OF THE EDINA CITY COUNCIL <br /> HELD AT CITY HALL <br /> FEBRUARY 6, 2007 <br /> 5:20 P.M. <br /> ROLLCALL Answering rollcall were Members Bennett, Housh, Masica and Chair Hovland. <br /> Staff present included, Gordon Hughes, City Manager; Heather Worthington, Assistant City <br /> Manager; Ceil Smith, Assistant to the City Manager; John Wallin, Finance Director; Eric <br /> Roggeman, Assistant Finance Director; Wayne Houle, City Engineer; Jennifer Bennerotte, <br /> Communications Director; and Darlene Wallin, Administration Secretary. <br /> Director Wallin indicated that Standard & Poor's (S & P) recently released its new Financial <br /> Management Assessments Criteria. S & P will provide its traditional bond rating, along with <br /> an assessment of financial management - rated strong, standard or vulnerable. S & P <br /> introduced the Financial Management Assessments Criteria making policies and practices <br /> more transparent that are considered most critical to credit quality. S & P, in order to perform <br /> the analysis, will rely on documentation provided by the City and with the organization's <br /> management. <br /> The Finance Department, has, recommended tightening some of the City's financial policies <br /> in order to protect the City's AAA and Aaa bond ratings. Mr. Wallin noted the City's <br /> objective was to mitigate credit risk and interest rate risk with adjustments to the investment <br /> policies. He noted that highlights of proposed changes to the financial policies would include <br /> additions to budgetary controls and fund balance policies. <br /> The legal level of budgetary control is located within the General Fund. The City Manager <br /> may approve budgetary transfers and the Council may approve supplemental <br /> appropriations. <br /> Mr. Wallin noted at the end of the fiscal year, unreserved designated fund balance would be <br /> maintained for Compensated Absences of 40 percent of the actual full-accrual General Fund <br /> liability. The City at that point would maintain unreserved designated fund balances for <br /> cash flow in a range equal to 40-45 percent of the subsequent year's budgeted tax revenue. If <br /> the amount should fall below that range, the City would create a plan to restore funds to an <br /> appropriate level. The policy indicated when the actual amount designed for cash flow falls <br /> above the range; excess funds automatically would be transferred to the revolving <br /> Construction Fund to support capital improvements. Mr. Hughes noted formal acceptance of <br /> the Financial Policies would be on the agenda at a future regular Council meeting. <br /> Mayor Hovland declared the meeting adjourned at 6:30 P.M. <br /> Respectfully submitted, r <br /> VIP),r <br /> 3 <br /> Debra A. angen, ity Clerk <br />