WS 2009 10 12
CHANHASSEN CITY COUNCIL
WORK SESSION
OCTOBER 12, 2009
Mayor Furlong called the work session to order at 5:30 p.m.
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilwoman Ernst, Councilwoman
Tjornhom, and Councilman McDonald. Councilman Litsey was present for a portion of the
work session meeting.
STAFF PRESENT:
Todd Gerhardt, Laurie Hokkanen, Kate Aanenson, Paul Oehme, and Greg
Sticha
With interest rates down to 4%, Greg Sticha explained the sale of the library bonds refunding
and the need for the City Council to ratify that sale at their first meeting in November.
REVIEW FINANCIAL POLICY AND INVESTMENTS, PAUL BLOOMGREN AND
JENNIFER CURTIS, WELLS FARGO.
Greg Sticha reviewed the highlights of the modifications to the City’s Financial Policy, which
has not been updated since 2000. Following is a summary of the changes:
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The debt policy section was removed.
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Language was added to address GASB 40.
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Safekeeping language was added to the policy that outlines the types of entities with
which the city can hold securities.
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The authorized investments section was enhanced by adding detail to each asset class,
ratings criteria and FDIC language for certificates of deposit.
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A concentration of credit risk section was added to prohibit an overexposure in any one
asset class and/or insurer.
Jennifer Curtis from Wells Fargo was available to answer any questions regarding changes to the
policy. Mayor Furlong asked how Chanhassen’s policies compared with other cities. Jennifer
Curtis explained that the changes made are to reduce ambiguities within the policy and to
comply with state statutes more closely. Councilwoman Ernst asked for clarification of item
number 4 under Objectives regarding the use of benchmarks and best practices to ensure that the
City operates efficiently and effectively. Paul Blomgren, a fixed income specialist with Wells
Fargo commented on which benchmarks and analysis are used. Mayor Furlong asked if the
emphasis was on return or safety. Greg Sticha explained that the City definitely thinks of safety
first. On page 8 under Concentration of Credit Risk, Mayor Furlong asked staff and Wells Fargo
to look at the possibility of using one or both “and/or”, and how frequently the City should be
reviewing it’s financial policy. Greg Sticha recommended that 3 to 5 years is a reasonable
timeframe. Jennifer Curtis reviewed the City’s Investment Portfolio Summary Report. Paul
Blomgren discussed market projections, the forecast for economic recovery and the affect on
projected interest rates, municipal credit and default risks, and provided an explanation of the
City Council Work Session – October 12, 2009
terms convexity, callables and bullets. Greg Sticha stated staff will continue to provide the
council with quarterly reports in the correspondence packet.
UPDATE ON THE CHANHASSEN STATION PARK AND RIDE.
Todd Gerhardt discussed the downtown Chanhassen Station Park and Ride noting Southwest
Transit has received grant money. He updated the council on the meetings and agreements that
have led to the submittal of site plans for Planning Commission and City Council review in
November. The first agreement is a Redevelopment Agreement between Bloomberg Companies
and the City of Chanhassen. Councilman McDonald asked if all parties were on the same page
regarding the definition of redevelopment. Kate Aanenson explained the options available to
Bloomberg Companies for redevelopment of their property will have to meet current city code.
Councilwoman Ernst asked staff to clarify the incentive to Bloomberg Companies, clarification
of the assessment amount and the benefit to the city. Todd Gerhardt explained how the
assessment repayment process will work and the associated risks to the City. Councilwoman
Ernst asked for further clarification that there will be minimal risk to the City. Mayor Furlong
clarified that Bloomberg Companies incentive is to improve their property to receive tax
increment financing to offset the assessments. Councilwoman Ernst noted she was struggling
with the fact that the park and ride ramp at Southwest Village isn’t full and the need for an
additional ramp in the downtown location. Mayor Furlong explained planning for future demand
versus current need. Todd Gerhardt reviewed the other three agreements: Cooperative
Agreement between the City of Chanhassen and Southwest Transit; Purchase Agreement
between Bloomberg Companies and the City of Chanhassen; and Assessment Agreement
between Bloomberg Companies and the City of Chanhassen. Councilman McDonald asked
about future plans for the historic train depot and clarification of who’s responsible for the
maintenance of the private/public road. Councilwoman Ernst asked staff to provide rider
projection numbers for the two facilities. Todd Gerhardt reviewed the schedule for Planning
Commission and City Council approval with the goal of getting the final approve prior to the end
of the year for cash flow benefits to Bloomberg Companies and the Dinner Theater.
Mayor Furlong adjourned the work session meeting at 7:00 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
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