Finance Committee Agenda and Packet 2021 09 27

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City Council Finance Committee Meeting Minutes 08/23/21 Page 2 of 4 APPROVAL OF THE MINUTES FROM THE JULY 19, 2021 MEETING The Finance Committee approved the July 19, 2021 minutes as presented. ANNUAL PERFORMANCE MEASURES UDPATE Megan Davis, Deputy City Manager, presented the newly created/updated Key Performance Indicators (KPIs) for all Programs/Sub-Programs. In 2020, the City hired a consultant to refine the KPIs. The total amount of Program/Sub-Program indicators have been reduced, but a new area of Community Indicators have been developed. Deputy Manager Davis indicated that benchmarking data will be available in the future to help compare with other cities. The Committee requested a visual indicator, such as coloring, to help communicate whether an indicator was good or bad. The report and corresponding narrative can be located in the packet of the August 23, 2021 Finance Committee Meeting. REVIEW AND DISCUSSION OF RESERVE POLICIES The Committee requested a review of the City's current Reserve Policies. Kevin Watson, Finance Director, presented a written summary of the Reserve Policies in the packet along with a copy of the actual Policy. The Committee focused most of their discussion on the General Fund Reserve Policy, which defines a minimum reserve and a target reserve. Director Watson gave a brief overview of the history and evolution of the General Fund Reserve Policy. Mayor Pro Tern Maloney facilitated the discussion and recommended a review and possible change to the target reserve. Mayor Pro Tern Maloney stated the need for more clarity with the reasons for setting the target reserve level. The Council has discussed maintaining a reserve for Open Space acquisitions in the General Fund, which and this has created a disconnect with some of the language within other sections of the Policy Council Member Dickinson stated that there is currently a nervousness in approaching the target reserve level, so the target reserve level may not be the correct level, or the current reserve levels may be too high. Council Member Dickinson believes there is resistance to reducing the reserve balance, but the City should reduce reserves in times of financial stress. The City should determine what amount of reserves is truly needed and any excess should be invested in ways to reduce future operational expenses. Council needs to be able to 3