CITY OF SUNNYVALE

City Council Study Session Summary

Update of Fiscal Sub-Element

July 18, 2006

The City Council met in study session at City Hall in the West Conference Room located at 456 West Olive Avenue, Sunnyvale, California on July 16, 2006, at 6:00 P.M., with Mayor Ron Swegles presiding.

City Council Members Present: 

Mayor Ron Swegles, Vice-Mayor Otto Lee, Councilmembers Dean J. Chu, Melinda Hamilton, John Howe, Christopher Moylan, and Anthony Spitaleri

City Council Members Absent: 

None.

City Staff Present:

City Manager Amy Chan, City Attorney David Kahn, Director of Finance Mary Bradley, Director of Public Works Marvin Rose, Director of Parks and Recreation Dave Lewis, Planning Officer Trudi Ryan, Finance Manager – Budget Grace Kim, Finance Managers Tim Kirby Elaine Wesely, Superintendent of Recreation Nancy Steward, Senior Management Analyst – Finance Pete Gonda, Finance Analyst Nick Kurns

Visitors/Guests Present:

Jack Rowe and Harriet Rowe, Sunnyvale Citizens

Call to Order: 6:06 P.M.

Study Session Summary:

City Manager Chan provided an overview of the Study Session, indicating that the process was intended to obtain Council’s thoughts and suggestions on the new draft policies.  Ms. Chan reminded the Council that they would have additional opportunities to review the Updated Fiscal Sub-Element at another Study Session and at a Public Hearing.  Then City Manager then introduced the Director of Finance, who introduced staff who worked on the project, and then began her presentation.

Director Bradley reviewed the Study Session agenda including purpose, background, policy development and policy review.  Ms. Bradley indicated that the draft policies were meant to be higher level policy statements rather that “how-to’s” such as Standard Operating Procedures (SOPs).  She then conducted a detailed review of the new policies, the policies proposed for deletion, and policies that were initially deleted but will be added back in the final draft.

Councilmember Howe then inquired about policy number eight in this section regarding annual depreciation expense set-asides in each utility fund being as a reserve for rehabilitation and replacement of fixed assets.  Councilmember Howe asked whether use of this set-aside would impact utility rates and whether a phased-in approach would be appropriate.  Staff indicated that it would attempt to quantify the issue.

Councilmember Chu wondered whether the depreciation tables were reconciled on a regular basis, and Director Bradley indicated that this occurred on an annual basis.  The City Manager also indicated that the City aggressively looks at replacement of fixed assets in order to avoid larger problems resulting from waiting too long.

Councilmember Chu inquired about the 22 benchmark cities used for best practices comparison and whether the jurisdictions had internal auditors, and what timeframes were used in their long range financial planning.  Staff answered that it would add these items to the list of benchmark cities and distribute to the Council.

(Marvin makes comments at this point about one of the deleted land policies that we were proposing to add back.  He said it was more of an SOP.  I think it was in reference to appraisals, but can’t be sure.)

Councilmember Howe asked whether there was a review mechanism in the Budget Appropriation Control Policy that would allow subsequent Councils to modify the fixed levels identified in the draft policies.  Director Bradley identified that the fixed amounts should be removed and would do so in the final draft.

During the Public Comments portion of the meeting, Citizen Harriet Rowe complimented staff on a job well-done, as did the Council.

Mayor Swegles then adjourned the meeting at 6:53 P.M. 

Adjournment: 6:53 P.M.

Respectfully submitted,

Pete Gonda

Senior Management Analyst, Finance